SEOUL, Aug. 15 -- Lee Jae Myung used South Korea's most emotionally charged public holiday on Saturday to make a peace offer Pyongyang was almost certain to receive with suspicion. Speaking on Liberation Day - the 81st anniversary of Japan's surrender in World War II and the occasion when the Korean Peninsula was freed from colonial rule - the South Korean president proposed replacing the 1953 Korean War armistice with a formal peace treaty and opening direct talks aimed at dismantling North Korea's nuclear arsenal.

The proposal lands two days before the start of Ulchi Freedom Shield, the annual joint military exercises between the United States and South Korea that Pyongyang calls provocative escalation and Washington calls routine read...