SEOUL, South Korea (CNN) -- The U.S.-led United Nations Command in South Korea reached a breakthrough agreement Tuesday with the North to resume military-level talks aimed at easing tensions on the troubled Korean peninsula.

The agreement will revive a military channel of communication for the first time in seven years, allowing general-level officers from both Koreas to meet at the border village of Panmunjom to discuss "armistice-related issues," the U.N. Command said in a brief statement.

"The overall purpose of the general officer talks is to reduce tensions on the Korean peninsula," the U.N. statement said. The first meeting has yet to be scheduled, it added.

The deal was described as the culmination of three years of intense negotiations to jump-start channels of dialogue.

North and South Korea are still technically at war because the Korean War ended without a peace treaty. Their border is the world's most heavily armed with two million battle-ready troops deployed on both sides.

The general officer talks will replace the Korean Military Armistice Commission, which supervised the 1953 armistice that ended the Korean War. The commission has been inactive since 1991, when North Korea withdrew from it.

Pyongyang pulled out of the military talks after refusing to recognize a newly appointed South Korean general as head of the U.N. delegation. Three years later, the North's communist government announced it no longer recognized the armistice.

The North has since insisted on direct military talks only with the United States.

The latest agreement came after South Korea agreed to let an American general represent the United Nations. That was a reflection of President Kim Dae-jung's attempts to promote reconciliation with the North through political and other exchanges.

Meanwhile, President Kim is on a nine-day state visit in the United States, where he has urged the United States to ease sanctions against the North.

Monday night, Kim pledged to an audience at the South Korea Embassy that their homeland would overcome its financial crisis and no longer need International Monetary Fund assistance by the end of next year.

He urged Korean-Americans to send money to relatives in Korea and to open bank accounts there to bolster the country's foreign exchange reserves.

"Within one year, we will overcome our difficulties. By the latter part of next year, we shall graduate from IMF assistance," Kim said.

Tuesday night, Kim will sit down with President Clinton at a lavish White House state dinner.

That will precede a morning meeting with the president and a State Department luncheon hosted by Vice President Al Gore.

The BBC also reported that North and South Korea are considering a joint football team for the World Cup in 2002.

Seoul Bureau Chief Sohn Jie-Ae and The Associated Press contributed to this report.