* N.Korea's ceremonial leader to attend opening of Winter Olympics
* Most senior N.Korean official ever to visit the South
* Hopes rise for high-level talks during visit
* U.S. Vice President Pence, Japan's PM Abe also to attend
* N.Korean art troupe to perform under sanctions exemption (Adds Tillerson remark in Peru)
By Hyonhee Shin
SEOUL, Feb 5 (Reuters) - North Korea's ceremonial leader will make an unprecedented visit to South Korea this week, officials said on Monday, as hopes grew for high-level inter-Korean talks during the Winter Olympics that begin in four days.
South Korea's presidential Blue House said Kim Yong Nam, president of the Presidium of the Supreme People's Assembly, would be the most senior North Korean official to cross the border to the South since the Korean War ended with a truce in 1953, and his visit would create "various opportunities" for high-level talks.
U.S. Secretary of State Rex Tillerson said in Peru on Monday "we'll have to see what happens" when asked whether U.S. Vice President Mike Pence or other officials would meet North Koreans at the Olympics.
Earlier, a U.S. State Department spokeswoman said there were no plans for U.S. officials to meet with North Koreans during or after the Olympics.
North Korea's official KCNA news agency confirmed on Monday that Kim would attend the Olympics' opening ceremony on Friday in South Korea's alpine resort town of Pyeongchang.
Seoul's Unification Ministry said Kim would lead a 22-strong delegation expected to arrive in South Korea on Friday for a three-day trip.
Kim's visit comes as Seoul pins its hopes on high-level talks during the Feb. 9-25 Games between not only the two Koreas but also the North and the United States.
"(Kim's visit) shows North Korea's resolve for improved inter-Korean relations and the success of the Olympics, as well as its sincere, earnest attitude," Blue House spokesman Kim Eui-kyeom told a news briefing.
The Games opening ceremony will also be attended by Pence, Japanese Prime Minister Shinzo Abe and other world leaders.
Pence is bringing a guest to counter what U.S. officials have described as North Korean propaganda at the Games: Fred Warmbier, the father of Otto Warmbier, an American student who died after being imprisoned in North Korea for 17 months. His presence is meant to remind the world of the "atrocities" that occur in North Korea, a White House official said.
South Korean President Moon Jae-in told his U.S. counterpart Donald Trump in a phone call on Friday the momentum of improved North-South relations would continue and that Pence's visit would be an "important prelude for that", the Blue House said.
Trump said during a meeting with North Korean defectors on Friday that, despite a "very tricky situation", North Korea's participation in the Olympics could result in "something good".
The South's Unification Ministry said a North Korean art troupe would also likely travel by ship to perform during the Olympics under an exemption from bilateral sanctions.
It said that with performances set for later this week, North Korea proposed on Sunday that the art troupe use a ferry for transportation and lodging.
South Korea banned North Korean ships from its ports and cut off most inter-Korean exchanges, including tourism, trade and aid in May 2010, after the sinking of one of its warships with the loss of 46 sailors that Seoul blamed on a North Korean torpedo attack.
Unification Ministry spokesman Baik Tae-hyun said the ministry was consulting with Washington and others on the possibility of temporarily lifting the ban to facilitate North Korea's proposal and "support a successful hosting of the Olympics".
North Korea used the ship, the Mangyongbong 92, for similar purposes during the 2002 Asian Games in the South Korean port city of Busan. The ship now chiefly operates between North Korea and Russia.
North Korea had initially asked that the art troupe be allowed to cross the border by foot via Panmunjom, in the demilitarised zone where a North Korean soldier staged a daring defection to the South in November.
The orchestra is scheduled to perform at Gangneung, near Pyeongchang, on Thursday and in Seoul on Sunday.
A lawmaker in Seoul said some 36,000 foreigners had been banned from entering South Korea, including people connected with extremist groups such as Islamic State, to ensure security during the Games.
Yi Wan-young told reporters of the ban after being briefed by the nation's spy agency on Monday. Yi said around 60,000 security personnel would guard Olympics venues.
Kim Yong Nam is North Korea's nominal head of state, while the reclusive country is ruled by Kim Jong Un, the third-generation hereditary leader.
Kim Yong Nam also attended the 2008 Summer Olympics in Beijing and the 2014 Winter Olympics in Sochi, Russia.
He is not blacklisted by the United Nations or the United States because he is not involved in the North's illicit nuclear and missile programmes.
In 2014, Pyongyang sent Choe Ryong Hae, a close aide to Kim Jong Un, as part of a high-level delegation to attend the closing ceremony of the Asian Games in Incheon, South Korea. Choe is subject to unilateral sanctions imposed by South Korea in 2016.
"Kim Yong Nam has little influence in North Korean internal politics, inter-Korean affairs or the nuclear issues, but has mainly been taking charge of summit diplomacy," said Cheong Seong-chang, a senior fellow at South Korea's Sejong Institute think tank.
"This time, if he gets to meet Moon, he could convey Kim Jong Un's message or invitation to Pyongyang," Cheong said.
Reporting by Hyonhee Shin; Additional reporting by Christine Kim in Seoul, Jeff Mason and David Brunnstrom in Washington and Mitra Taj in Lima; Editing by Paul Tait and James Dalgleish