SEOUL (AFP) - Officials from the two Koreas met for rare talks on Thursday to sort out the logistics of Pyongyang sending athletes and cheerleaders to the upcoming Asian Games in the South Korean port city of Incheon.

But they failed to reach any agreement as North Korean delegates left the border truce village of Panmunjom without setting the date for their next meeting.

South Korean officials indicated that discussion on the second meeting could be done indirectly through a border hotline if North Korea wants to continue talks.

It was the first meeting between the two sides for five months and comes at a time of simmering tensions following an unusually extended series of North Korean rocket and missile tests.

The talks also coincided with a joint South Korea-United States naval drill off the eastern coast of the Korean Peninsula that Pyongyang has condemned as a "reckless" act of provocation.

North Korea has been blowing hot and cold in recent months, mixing its missile tests with peace overtures that Seoul has largely dismissed as insincere.

The North announced in May that it would send about 150 athletes to the Asiad and later that they would be accompanied by a cheering squad.

The Panmunjom meeting was ostensibly aimed at hashing out the practicalities of how the North's delegation will travel to Incheon and where it will be accommodated.

It would also cover potentially sensitive issues such as the use of flags and cheering slogans, and who will foot the bill for the North Korean team's expenses.

North Korean officials said a 700-member delegation, including 350 cheerleaders, would be sent to Incheon, but they walked out abruptly when they were pressed to specify on their plan, according to a South Korean official.

"We express regret at the North's unilateral walkout," the official said.

An apparent stumbling block was who will foot the bill for the North Korean delegation's stay in South Korea, Yonhap news agency said.

Seoul wanted to break from its tradition of financially supporting visiting sporting delegations from the North, it said, to move into line with international sporting standards.

Because the 1950-1953 Korean conflict ended with a ceasefire rather than a peace treaty, the two Koreas technically remain at war.

Official contact is minimal and movement across the heavily-militarised border extremely restricted.

Pyongyang boycotted the 1988 Olympics in Seoul but sent athletes and cheerleaders to the 2002 Asian Games in South Korea's southern port city of Busan.

The last time sporting officials from the two sides met was in 2007 for talks on forming a joint cheerleading squad for the 2008 Beijing Olympics.

While the North Korean athletes and officials are likely to fly directly from Pyongyang, the cheerleaders are expected to travel in a ship that will remain offshore and serve as a temporary hotel.

Pyongyang has previously sent cheerleading squads - made up almost entirely of young women who perform synchronised dance moves - to three sporting events in the South including the 2002 Asian Games.

They were a huge draw on each occasion, and the squad that came for the 2005 Asian Athletics Championships in Incheon included Ms Ri Sol Ju, who is now the wife of North Korean leader Kim Jong Un.