North and South Korea on Tuesday agreed to end a military standoff that sparked an exchange of artillery fire and had ratcheted up tension on one of the world's most heavily-fortified borders.

The two sides also agreed to open a new channel of dialogue to discuss a range of issues with the aim of improving ties, raising hopes for a fresh push to restore talks and exchanges that had been cut off since 2010.

"The joint press release published at the contact provided a crucial landmark occasion of defusing the acute military tension and putting the catastrophic inter-Korean relations on the track of reconciliation and trust," the North's KCNA news agency on Friday quoted Kim as saying in a meeting with military aides.

Kim said the accord was reached "thanks to the tremendous military muscle with the nuclear deterrent for self-defense built by the great party as a pivot and matchless ranks single-mindedly united around the party," KCNA said, according to Reuters.

The comments were made at a meeting of the Central Military Commission of the North's ruling Workers' Party of Korea, the same forum led by Kim last week that warned of military action unless Seoul stopped its propaganda broadcasts.

On Friday, the South's Unification Ministry said South Korea's Red Cross had proposed, in a message sent to the North, to hold working-level talks in the border village of Panmunjom on Sept. 7 to discuss reunions of separated families.

Tuesday's accord included a pact to hold the reunions of families split during the 1950-53 Korean War, many of whom are aging and hoping to see lost family members for the last time.