Seoul and Washington have agreed to put off talks about the transfer of full operational control of Korean troops to Seoul until next year.
The handover, originally slated for 2012, is now scheduled for December 2015, but Seoul wants another delay for fear of a security vacuum if Combined Forces Command is dismantled.
Until they make a decision, the two countries will carry out a comprehensive review of the South Korean military's capability to respond to the nuclear threat from North Korea.
Defense Minister Kim Kwan-jin and his U.S. counterpart Chuck Hagel reached the compromise at the 45th Korea-U.S. Security Consultative Meeting here on Wednesday.
They also agreed to launch this month a joint working group headed by assistant ministers to study the issue. The group will review necessary conditions and the timing of the transfer.
"Our discussions, which have been ongoing, will continue to be ongoing," Hagel told reporters. "Both of us, as partners do, are working through those conditions, and I'm very optimistic that we will have an agreement on those conditions and we will get to where we need to be."
He added South Korea "has grown stronger, more professional, and more capable, especially over the past decade. This is a trend that we want to see continue."
A senior Defense Ministry official said the compromise opens "the possibility of re-delaying" the handover.
In last year's joint statement, the two countries specified the date for the transfer, but this year they did not.