SEOUL, January 5, 2012 (AFP) - South Korea said Thursday it sees no major problems with the North's leadership transition and wants better ties with its neighbour, despite Pyongyang's fierce criticism of "traitors" in Seoul.

The assessments came from Foreign Minister Kim Sung-Hwan and Unification Minister Yu Woo-Ik, days after the North threatened retaliation against their government.

The communist state proclaimed Kim Jong-Un as "great successor" after the death of his father Kim Jong-il on December 17, but warned the world its policy remains unchanged.

Yu told a briefing the North "seems to be focused on solidifying the new leadership under difficult conditions" but added: "We see no major problems in the process".

The untested Jong-Un, in his late 20s, had barely three years to prepare to take over the impoverished but nuclear-armed state. Some analysts have questioned whether he can assert his authority.

Yu, echoing comments Monday by the South's President Lee Myung-Bak, said he sees this year as "a significant turning point" on the divided peninsula.

He said the South should play a leading role to help the North's new leadership "make good choices about the future and bring about peace, prosperity and eventual reunification of the Korean peninsula".

Pyongyang's top decision-making body the National Defence Commission vowed last Friday never to have dealings "with the Lee Myung-Bak group of traitors".

It vowed unspecified retaliation for what it called insults by the Seoul government during the mourning period for Kim.

Foreign Minister Kim said the statement contained strong criticism "but I do not think we should respond to every single statement they release".

The North in the past had held talks with the South despite such comments, he told a separate briefing.

Lee said Monday there is a "window of opportunity" for better ties during the leadership transition but vowed to hit back hard for any provocations.

"The ball is with North Korea now," Kim said. "We are hoping that the North will establish an official internal mechanism and send us an (official) response soon."

Ties have been icy since the South accused the North of responsibility for two deadly border incidents in 2010.