The parade, marking the 70th anniversary of the founding of the North Korean army, was attended by leader Kim Jong Un and other senior officials. Another focal point is whether Kim Yo Jong has any message for Moon from her brother.
South Korea said on Monday it will try to arrange more reunions for families divided by the Korean War and seek to lower military tensions with North Korea as the first steps towards establishing grounds for a rare summit between the two Koreas.
U.S. vice-president Mike Pence, who was seated in the same box, did not interact with the North Koreans at any point, USA officials said.
"Although many Koreans are welcoming North Korea's participation in the Pyeongchang Winter Olympics, there are also significant criticism and concerns both domestically and internationally", the statement said.
The first liberal president in a decade, Moon during his inauguration speech past year that he would be willing to visit Pyongyang and meet with Kim Jong Un if that helps solve the nuclear problem.
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On the eve of the opening ceremony, the North carried out a large military parade in Pyongyang to mark the 70th anniversary of the foundation of the Korean People's Army and displaying what appeared to be ICBMs.
Alarm at this turn of events may have inspired Japanese Prime Minister Shinzo Abe to accept the invitation from President Moon to attend the opening ceremony of the Olympics, despite the current diplomatic spat between the two countries over the historical issues of "comfort women" during the Second World War. The previous meetings came after rounds of global talks aimed at eliminating the North's nuclear program, which eventually failed.
Pence told reporters that despite disagreements over how to approach North Korea, the state of the alliance between the USA and South Korea is "strong".
But analysts say it may be more hard for the South to arrange a summit with the North coming off a year in which Pyongyang test-fired dozens of missiles, including three ICBMs, and conducted its most powerful nuclear test to date.
Earlier on Friday, Pence said Moon gave his backing to additional measures the United States is planning to try to curb North Korea's missile and nuclear programs, speaking after paying tribute at a South Korean memorial.
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The Opening Ceremony kicked off on Friday, February 9th in PyeongChang and you probably missed them because ya know, time differences, but fear not we have all the best moments right here.
Abe is expected to urge Moon to steadily implement the deal, arguing that Japan has been carrying out its promises, Japanese government officials said.
Dressed in long, white padded jackets, they followed the flag with a blue silhouette of the Korean Peninsula against a white background.
The North has sent almost 500 people to the Pyeongchang Games, including officials, athletes, artists and also a 230-member state-trained cheering group after the Koreas agreed to a series of conciliatory gestures for the games.
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