Vice President Pence in a new interview published on Sunday indicated the United States would be willing to engage in talks with North Korea without preconditions as the Trump administration seeks to pressure Pyongyang to end its nuclear program.
Earlier, it has suggested that talks could start between the U.S. and North Korea once South Korea suspends its joint military exercise with South Korea.
It would be the first meeting of leaders of North and South Korea since 2007.
The senior diplomatic source said Pence "degraded the image of the United States as a superpower" by meeting with North Korean defectors along with Otto Warmbier's father, and by speaking strongly against North Korea on multiple occasions.
They were seated not far from a section of North Korean cheerleaders who are attending the Olympics in a sign of warming ties between the two Koreas that Pence and other US officials have warned against.
Yo-jong and the officials, led by ceremonial head of state Kim Yong-nam, departed on a North Korean plane from Incheon International Airport, west of Seoul, around 10:24 p.m., after attending a North Korean art troupe's concert in Seoul earlier in the day.
"But the Olympic moment that President Moon is trying to generate here is not a time to nurse those grievances", Jannuzi said.
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With a pleasant and humble smile, Kim Yo-jong left a heart-warming message in Seoul's presidential guest book, which couldn't go unnoticed on media.
South Korean President Moon Jae-in met North Korean leader Kim Jong Un's sister on Saturday, hoping to translate Olympics detente into meaningful progress towards resolving a tense standoff over the North's nuclear and missile programmes.
Nothing has been settled on any trip north by South Korean President Moon Jae-in.
Despite the mutual chilliness between US and North Korean officials in South Korea last week, behind the scenes real progress was made toward a new diplomatic opening that could result in direct talks without preconditions between Washington and Pyongyang.
US officials have been urging South Korea to be cautious in its rapprochement with the North.
The United States may be looking more favourably at diplomatic engagement with North Korea, possibly holding dialogue, as South Korea pushes forward with plans to establish grounds for a rare summit between the two Koreas.
In an effort to limit the fiery rhetoric of both leaders, the US and South Korea agreed to suspend military exercises in the region for the duration of the Olympics. They were also served North Korean-style fermented fish and white "kimchi" or fermented cabbage.
As the Olympics get underway in Pyeongchang, the motives behind the apparent thaw in relations between North and South Korea are not entirely clear, but any turn away from belligerence should be nurtured. He also suggested that North Korea should engage in talks with the United States.