Top aides to the leaders of North and South Korea were due to resume talks on Sunday after negotiating through the night in a bid to ease tensions that brought the peninsula to the brink of armed conflict.
The meeting at the Panmunjom truce village inside the Demilitarized Zone (DMZ) began on Saturday evening, shortly after North Korea's deadline for Seoul to halt anti-Pyongyang propaganda broadcasts or face military action, and broke before dawn on Sunday.
The envoys, shown on TV exchanging handshakes and tight smiles at the start of their meeting, discussed ways to resolve tensions and improve ties, South Korea's presidential Blue House said in a brief early morning statement. The talks were due to resume at 3 pm Seoul time (7 am BST).
"Both sides are under big pressure to get something out of this," said Jeon Young-sun, professor at the Institute of the Humanities for Unification at Konkuk University in Seoul, who said the length of the high-level meeting may be unprecedented.
The talks took place in South Korea's Peace House, just south of Panmunjom's often-photographed sky-blue huts, and the same venue where lower-level talks between the bitter rivals took place in February 2014, without ending in agreement.
The negotiations were interrupted with breaks for both sides to consult with their respective governments, and for snacks, the South's Yonhap News Agency reported.
"North Korea wants to stop broadcasts, while South Korea can't do it without achieving anything back," Jeon said.
North Korea and South Korea have remained technically in a state of war since their 1950-53 conflict ended in a truce, not a peace treaty, and inter-Korean relations have been in a deep freeze since the deadly 2010 sinking of a South Korean warship. Pyongyang denied responsibility.
The current tensions began early this month when two South Korean soldiers were wounded by landmines along the border. The North denies laying the mines. Days later, Seoul began its propaganda broadcasts in random three-hour bursts from 11 banks of loudspeakers, including news reports and K-pop music from the South, resuming a tactic both sides halted in 2004.
The crisis escalated on Thursday when the North fired four shells into the South, according to Seoul, which responded with a barrage of 29 artillery rounds. North Korea declared a "quasi-state of war" in front-line areas and made an ultimatum for Seoul to halt its broadcasts.
That deadline passed on Saturday without any reported incidents.
The United Nations, the United States and the North's lone major ally, China, have all called for calm.
The United States, which has 28,500 soldiers based in South Korea, said on Friday it had resumed its annual joint military exercises there after a temporary halt to coordinate with Seoul over the shelling from North Korea. North Korea regularly condemns the maneuvres as a preparation for war.
South Korean President Park Geun-hye's national security adviser and her unification minister met with Hwang Pyong So, the top military aide to the North's leader Kim Jong Un, and Kim Yang Gon, a veteran official in inter-Korean affairs, on Saturday, prompting hopes for a breakthrough.
Despite the announced talks, South Korea's military remained on high alert, a defense official said, and the South has said it has no plans to halt the broadcasts. Pyongyang's state media has continued its hostile anti-South rhetoric.
However, in announcing the meeting, the North's KCNA news agency referred to the South as the Republic of Korea, a rare formal recognition of its rival state, and in sharp contrast to its recent tone.
High-level talks between the two sides have been rare in recent years.
Pyongyang's two negotiators had made an unexpected visit to the South last October to attend the closing ceremony of the Asian Games, where they met Kim Kwan-jin, Park's national security adviser, who is leading the South's delegation this weekend. Those talks raised hopes for an improvement in relations, which did not materialise.
North Korea has been hit with UN and US sanctions because of repeated nuclear and missile tests, moves that Pyongyang sees as an attack on its sovereign right to defend itself.