Brief footage of the VIP enclosure at the arena showed South Korean President Moon Jae-in shaking hands first with Trump's daughter Ivanka, and soon afterwards with North Korean General Kim Yong Chol -- who reportedly expressed willingness to talk to Washington.
There was no indication of any interaction between Ivanka, who was placed next to Moon's wife, and Kim, who was in the row behind her -- just two seats away from US General Vincent Brooks, who commands Washington's forces in the South.
Kim arrived at the head of an eight-member delegation that crossed the Demilitarized Zone Sunday morning, but his visit has sparked angry protests from conservatives as he is accused of masterminding past attacks on the South.
The nuclear-armed North has gone on a charm offensive over the Games, sending athletes, cheerleaders and performers. Leader Kim Jong Un's sister Kim Yo Jong attended the opening ceremony.
Moon had an hour-long meeting with Kim ahead of the closing ceremony, in which the North Korean delegation said Pyongyang was willing to talk to Washington, according to Seoul.
The North -- which carried out multiple missile tests last year, including those capable of reaching the US mainland -- has long expressed its desire to talk to Washington without preconditions.
But the US says it must first take concrete steps towards disarming.
Kim Yo Jong had no interaction with US Vice President Mike Pence at the opening ceremony just over two weeks ago, even though they were just a few seats apart. According to the US, a planned meeting between the delegations from Washington and Pyongyang the following day was cancelled at short notice by the North Koreans.
Washington imposed fresh sanctions on Friday, with Donald Trump describing them as the heaviest ever.
Pyongyang denounced them on Sunday just as Moon was meeting Kim Yong Chol.
Analysts say the North's overtures to the South are intended to loosen sanctions imposed over its banned nuclear and missile programmes, and to weaken the alliance between Seoul and Washington.
But Moon did not immediately accept an invitation passed on by Kim Yo Jong from her brother to a summit in Pyongyang, saying the right conditions must be created.
And the athletes from North and South carried their own national flags at Sunday's closing ceremony, rather than the unification emblem they used at the opening ceremony.
Trump also warned that, if the latest sanctions do not work, the US may "go to phase two" that "may be a very rough thing".
A spokesman for Pyongyang's foreign ministry responded Sunday, telling the official KCNA news agency: "As we have stated on numerous occasions, we will consider any type of blockade an act of war against us."
The UN Security Council has already banned North Korean exports of coal -- a key foreign exchange earner -- iron ore, seafood and textiles, and restricted its oil imports.
Washington is now seeking to have the United Nations ban vessels from ports worldwide and blacklist shipping businesses for helping the North circumvent sanctions.
Kim Yong Chol himself is blacklisted under Seoul's unilateral sanctions against the North, meaning he is subject to an assets freeze. He is widely blamed for attacks including the torpedoing of Seoul's Cheonan warship in 2010 with the loss of 46 lives -- Pyongyang denies responsibility.
Conservative lawmakers staged an overnight protest near the border with the North, joined by hundreds of other activists, forcing his motorcade to take an alternative route to Seoul.
They waved banners including "Arrest Kim Yong Chol!" and "Kim Yong Chol should kneel in front of the victims' families and apologise!"
Officials from both Seoul and Washington had already said there would be no meeting between Kim Yong Chol and Ivanka Trump -- who is travelling with Korea specialists from the US administration and White House spokeswoman Sarah Sanders.
Kim Yo Jong's trip at the start of the Games -- the first visit to the South by a member of the North's ruling dynasty since the Korean War ended in 1953 -- made global headlines.
But Pence told an audience of thousands at the Conservative Political Action Conference that she was "a central pillar of the most tyrannical and oppressive regime on the planet".
Pyongyang denounced his comments Sunday, with KCNA carrying a statement that Trump should know the North would "never have face-to-face talks... even after 100 years or 200 years" with those those who had been "viciously slandering the dignity of our supreme leadership".
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)