But U.S. -based experts saw Kim's speech as a clear attempt to divide Seoul from its main ally, Washington, which has led an worldwide campaign to pressure North Korea through sanctions to give up weapons programs aimed at developing nuclear missiles capable of hitting the United States.
Cho told a media conference he expects the two Koreas to focus on bringing a North Korean delegation to the Pyeongchang Winter Olympics, which begin next month, should the talks be held on January 9.
Kim's overture was welcome news for a South Korean government led by liberal President Moon Jae-in, who favors dialogue to ease the North's nuclear threats and wants to use the Olympics as a chance to improve inter-Korean ties.
Kim said that rather than encouraging USA measures that "threaten the security and peace of the Korean peninsula", Seoul should instead respond to overtures from the North, and "stop nuclear war exercises with foreign forces".
Kim's customary New Year's speech is closely watched for indications of the policy direction the unpredictable and reclusive leader is likely to pursue in the coming year.
The Peace House is a building in Panmunjom controlled by South Korea.
Kim's comments on South Korea surprised analysts, who described them as the most significant part of his speech.
He said the North and South could meet urgently to discuss the North sending a delegation. In the address, Kim celebrated the completion of North Korea's nuclear weapons and ballistic missile programs, offered to enter conditional talks with South Korea with the offer of potentially sending a delegation to the upcoming Pyeongchang Winter Olympics in South Korea, and condemned global sanctions.
"These military exercises that you have with our enemy the U.S. must be halted at this very moment, because this behavior only causes fire and destruction on this great country", the North Korean leader said, apparently addressing South Korea.
Ship-to-ship trade with North Korea at sea is prohibited under United Nations sanctions adopted September 11. South Korea assessed that the most recent launch in late November of a new ICBM - its largest yet - could potentially reach Washington, though additional analysis was needed to determine whether it was capable of re-entry into the Earth's atmosphere. "The U.S. can never start a war against myself and our nation now". However, he also steadfastly declared North Korea a nuclear power.
"He wants to convince the global community that his nuclear weapons are purely for self-defense and wants to have a negotiated solution with the United States on the basis that he gets to keep its nuclear deterrent capability, Zhao said".