Seoul and Pyongyang reached a compromise agreement on Wednesday on the issue of reopening the Kaesong Industrial Complex, after seven rounds of tough negotiations lasting 133 days.

The agreement is a positive sign for relations between the Republic of Korea and the Democratic People's Republic of Korea. However, much work is still needed to build trust between the two sides and put relations on a positive footing, analysts said.

A five-point agreement that came out of the seventh round of talks committed both sides to making "active efforts" to resume normal operations as soon as possible, AFP reported.

The agreement moves the situation on the Korean Peninsula forward and shows the sincerity and goodwill of the two sides on the issue, said Gong Yuzhen, a professor on international affairs at Peking University.

"However, we cannot be too optimistic. The possibility of the situation worsening on the Korean Peninsula still remains," he said, "because the structural problems between Seoul and Pyongyang have not been resolved".

Shi Yongming, a researcher on Korean studies at the China Institute of International Relations, said: "It is good for the two countries to reach such an agreement. A failure would mean a setback for all the efforts the two countries have made."

The Kaesong park is designed as a political project, but so far it has had more economic benefits, said Shi, adding that more efforts should be made to deepen the trust between the two sides, given that Seoul and Pyongyang have been suffering from a low level of mutual trust for a long time.

Wednesday's accord was immediately welcomed by ROK company owners who had complained that both Seoul and Pyongyang were using their livelihoods as a political football, said AFP.

"We will do our best to help the Kaesong park boost its international competitiveness and become a globally viable place for investment," the agency quoted the owners as saying.

Operations at the Kaesong park have been suspended since early April when Pyongyang pulled out around 53,000 of its workers in protest at the joint annual military drill between Seoul and Washington.

The industrial park, where 123 ROK companies run factories, was established in 2004 as a rare symbol of cooperation between the two sides of the divided peninsula.

The Wednesday agreement came just six days before an annual military drill involving the ROK and the United States named "Ulchi Freedom Guardian", which the DPRK says is a rehearsal for war.

The drill involves about 50,000 ROK and 30,000 US troops simulating an invasion scenario from the DPRK.

"If the drill takes place, conditions in the region will become unpredictable and escalate to the brink of war," the DPRK's Rodong Sinmun newspaper said last month.

AFP contributed to this story.