The two Koreas teetered on the brink of war in 2010, but with the usually belligerent regime in the North calling for a new era of dialogue and co-operation, 2011 could bring fresh hope.
However, the ABC reports, South Korea is treading warily.
Fifty South Koreans died last year in attacks by the North - 46 of them when a corvette was torpedoed on 26 March and four in an artillery barrage on the island of Yeonpyeong on 23 November.
Seoul responded by holding massive live-fire military drills.
Pyongyang made its New Year's plea in editorials printed and broadcast in official state media.
"Active efforts should be made to create an atmosphere of dialogue and co-operation between North and South," state television reported.
"Confrontation between North and South should be defused as early as possible. This year we should launch a more determined campaign to improve inter-Korean relations."
Kim 'wants to calm things down'
Analysts believe the country's leader, Kim Jong-il, wants to calm things down in a bid to ensure the smooth succession of his son, Kim Jong-un.
But the ABC reports that the message includes a warning: "If a war breaks out on this land, it will bring nothing but a nuclear holocaust."
South of the 38th parallel, another New Year's message was being delivered. Wearing a traditional Korean robe, President Lee Myung-bak addressed the South Korean people.
"In the New Year of 2011, I am confident we will be able to establish peace on the Korean Peninsula," he said.