SEOUL, South Korea - South Korea said Thursday it had proposed another round of high-level talks with DPRK and indicated it hoped to discuss formally ending decades of hostility on the divided peninsula with a peace treaty.

South Korea's chief nuclear negotiator Chun Yung-woo speaks to the media in Beijing July 19, 2007. [Reuters]

"Now is the time to specifically discuss the issue of peace," Vice Unification Minister Shin Eon-sang told reporters at a regular press briefing, adding that the two sides need to "upgrade their relations."

Washington has also indicated it was prepared to begin negotiations with Pyongyang sometime this year on a peace treaty to replace the cease-fire that ended the 1950-1953 Korean War.

The US fought with South Korea against North Korea during the Korean War, a conflict that ended in an armistice not a peace treaty.

However, a peace treaty is unlikely until North Korea completely dismantles its nuclear program.

The move to bring permanent peace to the peninsula comes amid heightened optimism that North Korea will fulfill a pledge to end its nuclear programs.

North Korea has offered to fully declare and disable its nuclear weapons programs by the end of the year, indicating its willingness to comply with a February disarmament pledge after shutting down its sole operating nuclear reactor.

The participants in the six-party talks - the US, the two Koreas, China, Russia and Japan - were expected to end this week's session later Thursday after two-day of talks in Beijing on the next steps in Pyongyang's disarmament.

Shin also said Seoul had made an offer earlier this month to resume Cabinet-level talks in early August to "consult and resolve" unspecified inter-Korean issues.

The North has yet to reply to Seoul's proposal, he said.

South and North Korea have held Cabinet-level talks - the highest channel of dialogue between the two sides - since a landmark summit of their leaders in 2000. The two sides have alternately hosted the talks.

The two sides ended the last round in early June without any substantial agreement and failed to set a date for the next one as Seoul refused to send food aid to North Korea until it started dismantling its nuclear program.

But South Korea since started to send 400,000 tons of promised rice aid to North Korea as Pyongyang moved on its promise to close the reactor.

The UN nuclear watchdog confirmed Wednesday that North Korea had shuttered all five nuclear facilities at its Yongbyon nuclear complex.