The officials, who spoke on condition because they were not authorized to discuss the US approach publicly, also denied that Pence had been blindsided by the seating arrangement - with the North Koreans in the row behind him, allowing Kim Yo Jong to be easily pictured in profile next to the vice president.
Some North Korean experts believe tough United Nations sanctions that are cutting off most of the isolated North's sources of revenue have added pressure on Pyongyang to engage further with Seoul. His office said he did not interact with the North Koreans.
North and South Korea speak the same language based on the Hangeul alphabet, but differences have emerged since the 1950-53 conflict which left the two sides at a technical state of war.
Some 800 anti-North Korean protesters marched and staged street performances in front of the Deoksu Palace in central Seoul, condemning the North Korean leader and President Moon Jae-in, who they regard as too soft on the North.
The cheering came when athletes from North and South Korea walked together into Friday's Opening Ceremonies under a single Korean flag in a rare display of unity. They stood from their seats and, smiling, shook each other by the hand.
The sister of the North Korean leader has arrived in South Korea, dressed in a black coat and absorbing a barrage of camera flashes.
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"You must have had a hard time due to the cold weather", Moon said as he greeted Kim Yo-jong, referring to the frigid temperatures during Friday's opening ceremony.
The North and South held summits in Pyongyang in 2000 and 2007, both hosted by late Kim Jong Il, the father of Kim Jong Un.
And don't even point at badges depicting the North's former leaders which are pinned to every North Korean visitor's chest.
Moon has invited Kim and other senior North Korean officials to a luncheon at Seoul's presidential palace on Saturday.
The presence of Kim Yo Jong as part of the delegation to the Olympics led to speculation that she might have been sent because, as a close relative of the North Korean leader, she would be in a position to deliver a personal message to Moon.