China called on both South and North Korea Friday to take steps to nurture better cross-border relations, with Pyongyang's "peace offensive" raising fresh concerns that tension on the peninsula may rise sharply again ahead of joint military drills between Seoul and Washington.

North Korea has proposed this week that both Seoul and Pyongyang stop military provocations and mutual slandering to improve bilateral relations, but demanded the cancellation of upcoming South Korea-U.S. military exercises.

South Korea brushed off the North's proposal that strongly indicated that Pyongyang won't give up its nuclear weapons program, questioning its sincerity. Some Seoul officials described the North's latest reconciliatory gesture as a "camouflaged peace offensive."

"The DPRK (North Korea) and the ROK (South Korea) are of the same ethnic group," China's foreign ministry spokesman Hong Lei told reporters during a daily briefing, when asked about the North's proposal. "Improving bilateral relations and realizing reconciliation and cooperation serve the fundamental interest of the two sides."

"We hope that the two sides will demonstrate goodwill and take concrete actions to improve bilateral relations so as to bring the situation of the region to stability," Hong said.

North Korea has a track record of using such a tactic, called the "peace offensive" by some, to split public opinions in South Korea or to put the blame on Seoul for later provocations.

South Korea and the U.S. plan to hold command post exercise Key Resolve and joint field training exercise Foal Eagle from late February till the end of April to enhance joint combat readiness and deter threats from North Korea.

The allies say that the exercises, an annual event for several decades, are defensive in nature, but North Korea has denounced them as a nuclear war rehearsal.

Concerns remain high over possible provocations by North Korea after its young leader Kim Jong-un purged and executed his uncle and political mentor, Jang Song-thaek, last month.

Ahead of last year's joint drills with the U.S., North Korea conducted its third nuclear test and threatened to launch a nuclear war against South Korea, the U.S. and Japan, prompting America to deploy more military assets to the Korean Peninsula.

About 28,500 U.S. troops are stationed in South Korea, a legacy of the 1950-53 Korean War. (Yonhap News)