PANMUNJOM, Korea — Negotiators from South and North Korea met Saturday to prepare for the first-ever summit by their leaders, an event that would be the biggest diplomatic breakthrough in more than half a century of division.

It was the first of several planned meetings between envoys from the two Koreas since they announced last week plans for a summit in the North's capital of Pyongyang on June 12-14. South Korean President Kim Dae-jung and North Korean leader Kim Jong Il will take part.

The Koreas were divided at the end of World War II, then went to war five years later. They signed an armistice, rather than a permanent peace treaty, at the end of the Korean War in 1953.

But in a development underlying the sensitivity of relations before the summit, Lee Jae-jung, chief policymaker of South Korea's ruling Millennium Democratic Party resigned Friday after being criticized for reportedly suggesting that Seoul repatriate convicted North Korean spies as a goodwill gesture.

Kim Ok-du, the party's secretary-general, called Lee's remarks "inappropriate" saying that the issue is not under consideration or study by his party or the government.

Most of the two dozen spies were caught during or after the war and are now free after serving prison terms. However, they remain under protective watch for security reasons and can't leave South Korea without special government permission.

In a rare scene in Panmunjom, a truce village inside the Demilitarized Zone that separates the two sides, several dozen North Korean officials and reporters walked across the border to meet their South Korean counterparts. Some were smiling.

Before crossing the border, the North Koreans were given a written South Korean assurance for their safety, standard procedure in such inter-Korean contacts.

Three North Korean delegates, accompanied by three assistants met an equal number of South Korean officials at Peace House, an administrative building in the southern sector of the neutral border village.

After exchanging small talk on the warm spring weather and rice planting, the delegates went behind closed doors for talks on the agenda and other issues, including security and communications.

North Korea's agreement to hold the contact at the border village was surprising. No inter-Korean border contact had been held since the summer of 1994 when the two sides met to prepare a summit that was canceled after the sudden death of North Korean leader Kim Il Sung. Relations between the two Koreas worsened afterward and Pyongyang shunned border talks with Seoul.

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Before leaving Seoul for a one-hour drive to Panmunjom, Yang Young-shik, the chief South Korean delegate, said he expected smooth progress in the preparatory talks.

"There is nothing that cannot be resolved. I'll listen to whatever they raise, with the thinking that I'm digging a new well," he told reporters.

The agenda is the most touchy subject to be tackled. South Korea plans to propose that it include economic cooperation, peace measures, the reunion of separated family members and the establishment of a permanent government-to-government channel of dialogue.

North Korea's grievances include the presence of 37,000 U.S. troops in South Korea and South Korea's anti-communist national security laws.

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