North and South Korea have held ceremonies ahead of work to re-link road and rail connections between the two states for the first time in more than 50 years.

Fireworks crackled and balloons were set free at the ceremonies, held simultaneously on either side of the heavily fortified border separating the Koreas.

The historic event was shown on South Korean television

It is the latest act of reconciliation between the rival neighbours, and came a day after North Korea moved a step closer to normalising relations with Japan following an unprecedented visit to Pyongyang by Prime Minister Junichiro Koizumi.

Work to clear the heavily-mined buffer zone on the border will begin on Thursday, and the first of the rail links is expected to be re-connected as early as November.

The South Korean Prime Minister-designate Kim Suk-soo said he hoped the work would herald a new chapter in relations between the two Koreas.

Symbolic ceremonies

At one of the ceremonies on the South Korean side of Demilitarised Zone (DMZ), workers unlocked a barbed wire gate leading to the border.

South Korea has already built a rail line and road on the western side of the peninsula right up to the DMZ fence, and on Wednesday, a train trundled as far as it could.

Re-linking the Koreas

Donghae (western) rail line due next autumn Parallel road due by November Gyeongui (eastern) rail line due end of this year Parallel road due by spring 2003

Television pictures then showed a South Korean girl dressed as a North Korean step out from behind the fence and link hands with a South Korean boy, as fireworks exploded overhead.

Speaking at Dorasan train station - the last stop on the South's western rail line - the South Korean prime minister-designate said the two countries had embarked on a "monumental project".

"We are burying a history marked by the scars of war and the pain of division," he said.

Closer ties

Rail links between the two Koreas have been cut since the end of the 1950-1953 Korean War.

North and South Korea agreed to re-link the connections two years ago as part of a series of steps to improve relations.

The project involves two sets of cross-border road and rail links, on the east and west coast of the DMZ.

The plan is to link the western line to China and the eastern line to Russia, so freight can travel overland to Europe, significantly cutting costs.