North and South Korea have agreed to a series of confidence building measures aimed at easing tensions between the two nations. The initiatives follow an agreement earlier this week to step up efforts to avoid military clashes between the two rivals.

North and South Korean officials announced plans Saturday to open two roads and begin tests on two railways that will cross their heavily-fortified border.

The agreement followed four days of economic talks in North Korea, and also included promises of a donation of 400,000 tons of rice from the South once the transportation links have been established.

Plans to build an industrial complex in the North for South Korean corporations were also finalized.

For impoverished North Korea, the agreement provides much needed economic and humanitarian assistance. It helps ease tensions along the border, and strengthens political ties between the two countries, which are still technically at war.

The talks in North Korea took place against the background of North Korea's long-running dispute with the United States and its allies, over Pyongyang's controversial nuclear weapons programs.

But Tim Savage, a private political analyst in South Korea, believes the agreement could also bring near-term economic benefits to the South.

"The railway potentially gives South Korea a landlink to mainland Asia and beyond that to Europe, which it doesn't have right now, and that could be enormously beneficial in the long run," he said.

Mr. Savage believes the move also reflects the North's desire to ease tensions with its neighbors while it maintains a hard-line position towards the United States.

Tensions between North Korea and the United States have been high since 2002, when Washington learned that Pyongyang had begun a secret nuclear weapons program, in violation of several international agreements. "From the North Korean standpoint, nothing is going to happen vis a vis the U.S. before the November elections, so what they're trying to do is improve things on other fronts, with the Japanese and the South Koreans, so in their view to isolate the United States on the nuclear issue," said Tim Savage.

A new round of multination talks on the North's nuclear program is scheduled for late June in China. The United States, the two Koreas, China, Japan and Russia are all expected to attend.