SEOUL (AFP) - South Korea on Friday proposed formal talks next week with the North on arranging the first reunion in three years of families separated by the 1950-53 Korean War.

In a telephone message, the South suggested holding discussions on August 23 under Red Cross auspices at the border village of Panmunjom, where the ceasefire ending Korean War hostilities was signed, the Unification Ministry said.

South Korean President Park Geun Hye had called for a resumption of the suspended reunion programme in a speech on Thursday to mark the end of Japanese colonial rule over the Korean peninsula.

Her initiative came a day after the two Koreas reached a breakthrough agreement in their efforts to resume operations at a joint industrial zone that was closed in April at the height of soaring military tensions.

The reunion issue is a highly emotional one. The division of Korea in 1945 and the war that followed saw millions of Koreans separated from other family members, with no direct mail or telephone service.

Around 72,000 South Koreans - half of them over 80 - remain on an official waiting list for an opportunity to meet relatives living in the North, but thousands die every year before getting their chance.

In the past, only a few hundred have been selected for each event.

Ms Park had urged that the programme be resumed in time for the Chuseok (Thanksgiving) holidays in September - when Korean family members traditionally gather together.

"We are working on a specific plan for family reunions before or after the Chuseok holidays," Unification Ministry spokesman Kim Hyung-Suk told reporters.

The reunion programme began in 2000 following an historic inter-Korean summit. Sporadic events since then have seen around 17,000 people briefly reunited.

The last such meeting took place in late 2010, after which the programme was suspended in the wake of North Korea's shelling of a South Korean border island.