SEOUL, South Korea (AP) -- South Koreans on Sunday welcomed news that their athletes will march with their North Korean counterparts during the opening ceremony at the Olympics.

 But the agreement, mediated by the International Olympic Committee, was hardly a surprise to South Koreans, who in recent months have seen far more significant improvements in the relationship between the two rivals.

 The Olympics agreement "is something we can all celebrate," said Shin Dong-hoon, a stock exchange official. But he added that it is "a small thing, compared to what both Koreas have already done or agreed to do."

 The Koreas, divided into the communist North and the pro-Western South in 1945, have never signed a peace treaty since they fought a three-year war in the early 1950s. They share the world's most heavily armed border with nearly 2 million troops deployed on both sides.

 The relations between North and South have improved dramatically since their leaders met for the first time in June and agreed to work together for reconciliation and unification.

 The Koreas have since stopped propaganda broadcasts against each other and reopened border liaison offices. They allowed 200 people to cross the border in August for family reunions and will arrange two more family reunions by year's end.

 The two also decided to reconnect a cross-border railway and agreed to discuss opening a military hotline and a regular channel of dialogue between their defense leaders.

 Still, the latest news elated many South Koreans.

 "It's better to march together. We are one people," said street-cleaner Koh Jong-soo, 55.

 South Korean media reported the joint march as a secondary news item after the announcement Sunday of a visit to Seoul by a special North Korean envoy beginning on Monday.

 South Korean officials attach great significance to the visit of the envoy, who is expected to discuss a variety of tension-easing issues, including the date of leader Kim Jong Il's planned visit to Seoul.

 South Korean officials believe that the Olympic march will help their efforts to promote sports exchanges with North Korea, including sharing some of the 2002 World Cup final games with the North.

 There was no immediate North Korean media reaction to the agreement in Sydney.