SEOUL - South Korea's President Lee Myung-Bak called Tuesday for talks with North Korea to ease heightened tensions, and promised the impoverished nation aid if it scraps its nuclear and missile programmes.
The South "is ready to engage in dialogue with the North anytime with an open mind", Lee told a ceremony marking Independence Movement Day.
Cross-border tensions have been high for almost a year, after two deadly border incidents blamed by Seoul on Pyongyang.
The North has described a major US and South Korean military exercise launched Monday as a rehearsal for invasion. It has threatened to turn Seoul into a "sea of flames" in the event of any provocation.
Lee, in a speech hailing the nation's progress since a 1919 campaign for independence against Japanese colonisers, said it was time to sweep away the legacy of the Cold War.
North Korea should join a new wave of peace and prosperity in Northeast Asia, he said.
"There is no reason for South Korea not to help our compatriots in the North when it is helping many other countries," Lee said.
"The North should step forward for serious dialogue and cooperation and refrain from developing nuclear weapons and missiles."
Lee, however, repeated calls for Pyongyang to take "responsible measures" on past provocations and follow the path of genuine reconciliation.
The South accuses the North of torpedoing a warship in March 2010 near the disputed Yellow Sea border with the loss of 46 lives, a charge it has denied.
In November the North shelled a South Korean island near the border, killing two marines and two civilians and sparking outrage in the South.
Military talks intended to improve icy relations broke down last month over the South's demand that the North accept responsibility for the border incidents.
Lee has said in the past he is open in principle to a summit with the North's leader Kim Jong-Il. The two sides were widely reported in 2009 to have held initial contacts about such a meeting, but relations have worsened markedly since then.
The Korean peninsula was divided into US and Soviet zones of influence after Japan's 1945 surrender, and into separate countries three years later.
Lee said peaceful unification was the way to complete the work of independence began 92 years ago. The South would bolster its capacity to handle eventual reunification, he said without elaborating.
Lee has proposed a unification tax to help meet the potentially huge cost of reunifying the South with its vastly poorer neighbour.