Earlier, Kim Yo-jong, sister of North Korean leader Kim Jong-un, had visited the Cheong Wa Dae in Seoul and invited South Korean President Moon Jae-in to Pyongyang to conduct their first summit in more than a decade.
He repeatedly called Kim Jong Un's regime "the most tyrannical" on Earth and studiously avoided talking to or even acknowledging the North Korean delegation, even when they sat just feet apart in the VIP box at the opening ceremony.
The night before, Kim Yo Jong and other North Korean delegates attended the opening ceremony of the Pyeongchang Winter Olympics, watching a "unified" Korean team march under a banner showing an undivided Korean Peninsula.
Highlighting the North's deft diplomatic moves, the state-run Korean Central News Agency on Sunday reported that the delegation had an "honest and open-minded" discussion with the South Korean side on improving relations, and described talks with Moon as "sincere and warm".
In addition to Moon and Kim's sister Kim Yo Jong, the game was attended by Kim Yong Nam, North Korean titular head of state, and International Olympic Committee (IOC) President Thomas Bach.
In a stark illustration of his efforts to pull in Pyongyang without pushing away Washington, Moon watched short-track speedskating with Vice President Mike Pence at the Pyeongchang Winter Olympics on Saturday night, February 10.
That is the assessment of a former South Korean government minister and political experts who say the North has used the Games to drive a wedge between South Korea and its US ally and to potentially ease pressure on its sanctions-crippled state.
During the bilateral talks over lunch, neither side made mention of Pyongyang's nuclear issue, which is attracting worldwide attention as a major security concern and has heightened tensions, a presidential office source said.
Even Japanese Prime Minister Shinzo Abe, who has shared the American skepticism of warming inter-Korean relations and pressed Moon against falling for the North's "smile diplomacy", greeted Kim Yong Nam.
The vice president said that, while they were at the speedskating event, Moon talked about his meeting with the North Koreans earlier in the day.
A look at notable quotes from the Pyeongchang Winter Olympics
The judges did not agree with the naysayers. "We didn't know what to expect", said Moir about his third Olympics adventure. The original move from January's nationals can be seen at the 2:26 mark in the video below.
The North Korean delegation and Moon watched the Koreas' unified women's ice hockey team's first match against Switzerland in Gangneung late Saturday.
But Kim Jong Un seems determined to try to divide the allies.
Pence said Friday that the US would oppose talks between the two Koreas until the North agreed to open negotiations on ending its nuclear program.
Sunday's lunch will take place at the Walker Hill hotel in eastern Seoul, officials said.
Moon has long sought engagement with the North to bring it to the negotiating table, and for months has promoted Pyeongchang as a "peace Olympics".
But Moon, a liberal who has always wanted to engage the North, will also have to convince a good portion of his own people who are deeply wary about North Korean intentions.
"There is no daylight between the United States, the Republic of Korea and Japan on the need to continue to isolate North Korea economically and diplomatically until they abandon their nuclear and ballistic missile program", Pence told reporters during the return flight to the United States.
North Korea spent billions to put on the World Youth Festival in July 1989, a year after Seoul hosted the Summer Olympics.
While some concessions - including an at least partial scaling back of the US -led pressure campaign - could be a bridge too far for Washington, any failure of the current inter-Korean rapprochement would also likely be seen as a win for Pyongyang. Seafood, once a major North Korean export, was now more widely available at home after United Nations sanctions banned these exports in August. The U.S. delegation numbers 244 but not all athletes participated due to their training or competition schedules. -South Korea alliance were evident immediately after the announcement.