"We wanted to show the alliance seated together", the official said.
Vice President Mike Pence's tour, which was meant in part to counter the North's outreach to Seoul, has taken a back seat to the highly anticipated meetings between senior North Korean officials and South Korean President Moon Jae-in.
Kim Jong Un's sister arrived at a train station Friday morning.
However the opening ceremony was not shown on North Korean state TV, which was broadcasting patriotic songs and slogans celebrating industry and the armed forces. Once she returned from Switzerland, she began working for the North Korean government.
The two Koreas have worked together to send a joint team to major worldwide sports events only twice before.
Wall Street falls at the open, Dow off 120 pts
No doubt the computer programs that dominate stock market trading played a huge role in how rapidly the market sank. ET (1332 GMT), Dow e-minis were up 111 points, or 0.45 percent, S&P 500 e-minis were up 13 points, or 0.49 percent.
The North Korean athletes competing at these Olympics are also privileged citizens.
"We thank you", he said.
The Korean peninsula has been divided since the 1950-53 war and the two sides have never signed a peace treaty. The two countries are officially at war and in today's context this was quite notable.
"We thank you. All the athletes around me, all the spectators here in the stadium, and all Olympic fans watching around the world... we are all touched by this wonderful gesture".
Pence also reportedly avoided North Korea's delegation at a VIP reception prior to the ceremony.
He also commented that he thought Mr Trump and Mr Kim would get along well should they ever meet in person "because in my opinion, they're pretty much the same person".
Moon's chief press secretary Yoon Young-chan later explained that the USA vice president was originally scheduled to hold separate dinner with US athletes at the PyeongChang Olympic Games, insisting his early departure did not mean a boycott.