The start of the talks was announced by South Korea's Unification Ministry, Yonhap News reported.
The meeting, coming two days after the first round ended without much progress, opened Friday morning at the same border village of Panmunjom, as visiting U.S. Secretary of State John Kerry ended his one-day trip to South Korea prior to traveling to China on the second leg of his Asian tour. The high-level talks are the first such between the two neighbors in seven years.
Kerry's presence in South Korea provided greater significance to the inter-Korean talks being held at a time of heightened friction on the Korean Peninsula. The United States is as much concerned about the peninsular tensions because of its close ties to Seoul and because of North Korea's ongoing nuclear weapons program.
Besides resolving the impasse with North Korea over the military drills during the high-level talks, South Korea also would seek to firm up the reunions of families separated since the 1950-53 Korean War. The two sides had agreed last week to allowing six days of reunions starting next Thursday, but a day after the agreement the North threatened to back out of the deal if the South went ahead with the military drills scheduled to start at the end of the month and last through April.
The South has refused to scrap the annual drills as demanded by the North, saying they are routine and defensive in nature. However, the isolated Communist country sees them as a rehearsal for an invasion against it.
At the first round Wednesday, the North demanded Seoul reschedule the military exercises until after the family reunions, but that was turned down by the South, Yonhap reported.
"We will make sure that the family reunions won't be hindered because of the military exercises and there won't be any disruptions to the exercises because of the reunions," Min Kyung-wook, a spokesman for the South Korean president, said.
Kerry, at a joint news conference Thursday with his South Korean counterpart, noted the family reunions and the military exercises cannot be linked.
"The United States does not believe that it is appropriate to link humanitarian issues such as [family] reunification to any other issues," Kerry said.
The family reunions, seen as a first step to improving inter-Korean relations, are a highly emotional issue as most of the separated family members are quite old, raising concerns that they may not have much longer to live to realize their dream of meting with their long-long relatives.