A 100 elderly people from North and South Korea are being reunited with family members they haven't met in over half a century, at the Diamond Mountain resort in North Korea. The reunion comes amid an unprecedented warming of relations between the two Koreas. But there are still obstacles along the road to reconciliation.

This is the fifth round of meetings between family members since the leaders of the two Koreas held their first and only summit in 2000. The reunions will run through September 18, and among the South Koreans is a 94-year-old man who is hoping to see his son for the first time in more than half a century.

Millions of Koreans were separated by the division of the peninsula in 1945, and by the civil war that ended in 1953. Since then, people from North and South Korea have been forbidden any unauthorized contact with the other side.

Official contacts between the North and South had broken down earlier this year, but they suddenly began gathering pace several weeks ago. Last weekend, the two Koreas played a friendly soccer match, North Korea has invited the South's martial arts team to visit Pyongyang and the orchestra affiliated with South Korea's national broadcaster has announced it will perform two concerts in the North later this month.

There are still obstacles to overcome, however. Representatives from the two sides failed Friday to reach agreement on a South Korean tourism project in Diamond Mountain, on North Korea's east coast, where this week's family reunions are taking place. South Korea's Unification Ministry says the three days of discussions broke down over Pyongyang's demands that the South Korean government increase subsidies for the tours. Local media reports quoted the government as saying it could not provide funding for private business.

The tours to the mountain resort are run by Hyundai Asan, a subsidiary of one of South Korea's largest conglomerates. Since the tours began in 1999, almost half a million South Koreans have been able to travel to the resort, but this hasn't prevented the company from losing millions of dollars on the project. As a result, Hyundai Asan is delaying payment of about $560 million to North Korea.

Despite this setback, the reconciliation process will continue this weekend, when military officials from the two Koreas meet at the border village of Panmunjom. They will discuss safeguards for troops involved in reconnecting severed transport links between the two countries, following a wide-ranging agreement last month.

The discussions will center on how to avoid accidental military clashes as the two sides clear mines from the four-kilometer-wide Demilitarized Zone separating the two countries. The Korean border is the most heavily guarded in the world, with two million armed troops facing each other.

If the project remains on schedule, the two sides will be reconnected by rail and road links by the end of this year.