Protesters hold placards during a rally on Monday against the Ulchi Freedom Guardian ROK-US joint military exercise, outside a US Army base in Seoul. Jung Yeon-Je / Agence France-Presse

Washington and Seoul launched an annual military drill against a simulated invasion from Pyongyang on Monday, but analysts said the exercise will not overshadow the positive momentum that exists between the two neighbors on the Korean Peninsula.

Despite the sensitive timing and content of the military exercise, analysts predict calm on the peninsula in the long term. However, more strenuous diplomatic efforts are needed to tackle core differences between the Republic of Korea and the Democratic People's Republic of Korea, they added.

The Ulchi Freedom Guardian military exercise is set to continue until Aug 30. It involves 30,000 troops from the United States and 50,000 from the ROK, the Associated Press cited the ROK's Defense Ministry and the US military command in Seoul as saying.

Instead of publishing near-daily warlike rhetoric and threatening nuclear conflict, as it has done during previous annual US-ROK military exercises, the DPRK responded this time in an unusually mild manner.

Last month, Rodong Sinmun, the ruling party's newspaper in the DPRK, warned that the exercise could bring the peninsula "to the brink of war".

But since then, there has been no repeat of the bellicose rhetoric. So far, its state media have not made any major statements on the exercise.

"Pyongyang's reaction is relatively calm this time. It reflects the fact that the DPRK is adjusting its policy toward the ROK," said Gong Yuzhen, a professor of international affairs at Peking University.

Jin Canrong, an international affairs professor from Renmin University of China, said the DPRK has realized that a hard stance will not help it win international support and avoid being isolated by the international community, so it has changed its attitude.

The DPRK needs to tackle its domestic economic situation, which requires the government to change its tune, he said.

The ROK and the DPRK reached an agreement last week on a framework for the resumption of operations at the Kaesong industrial park, which was closed in April at the height of a surge in military tensions on the peninsula, following the DPRK's third nuclear test in February.

To push the breakthrough forward another step, ROK President Park Geun-hye later urged Pyongyang to "open its heart" and resume the reunions of families separated since the Korean War (1950-53).

The ROK and the DPRK used to hold frequent reunions of this sort, but they were suspended three years ago.

Pyongyang agreed on Sunday to hold talks on the reunion issue. It also proposed to restart its Mount Kumgang scenic resort, which, together with the Kaesong industrial park project, marks an important foreign currency earner for the DPRK.

"There is a trend of Seoul and Pyongyang improving their relations," said Gong, adding that the eased situation will last for a while at least.

But the key factor in achieving reconciliation is how the two sides deal with the nuclear issue on the peninsula, he said.

When the ROK and the DPRK ceased fighting in the Korean War, they only agreed an ongoing ceasefire, not a formalized peace treaty.

Presiding over a meeting of her National Security Council on Monday, Park stressed that Seoul can never afford to let its guard down, Agence France-Presse reported.

"No matter how peaceful things are, a crisis would come if we forget about war," her spokeswoman quoted her as saying.

"It is very important to ensure firm security preparedness in any circumstances."