North and South Korean officials exchanged specific proposals for trade across the Demilitarized Zone dividing Korea today and agreed to continue the discussions next month.

Punctuated by smiles and talk of Korean brotherhood, the 2 1/2-hour meeting at the truce village of Panmunjom was the first government-level, face-to-face contact between the rival sides in more than four years.

South Korean chief delegate Kim Ki Hwan spoke of his government's desire to "restore national unity at an early date through exchanges and cooperation."

His North Korean counterpart, Lee Song Rok, expressed similar sentiments. "We must not repeat past failures and must make this meeting successful for the benefit of both sides," he said.

The meeting followed an unprecedented transfer of flood relief aid from North to South six weeks ago. The two sides also are set to resume discussions next week between their Red Cross societies on reunification of families.

However, it is unclear whether the two sides will move on to substantive military and political issues that have made the Korean Peninsula one of Asia's prime flash points.

North and South have had no economic relations since trade was halted in the period of mounting tensions that preceded the outbreak of the Korean War in June 1950.

In today's session, the South said it would like to buy mineral commodities, such as coal, iron ore and scrap metal, and farm and fishery products, such as silk cocoons, corn and beans. It offered to supply the North with manufactured goods, including steel and aluminum products, automobiles, power tillers, color televisions and watches.

Transport would initially be by sea, the South suggested, with the possibility of later reopening rail lines cut since the Korean War and establishing a trucking exchange center at Panmunjom.

Kim made detailed technical proposals for the currencies, banks and pricing to be used. In a gesture toward both sides' stance that Korea is one country temporarily divided, he proposed that there be no tariffs.

The two sides should set up a North-South economic cooperation committee, Kim said in conclusion.

Lee followed with the North's proposal, suggesting selling the South goods including machinery, iron ore and coal. Purchases from the South would include steel products, naphtha, fish and salt.