The opening ceremony’s potentially awkward seating arrangement comes after a decades-long dispute between the US and North Korea, which has intensified as Kim Jong-un continues to build his nuclear arsenal in defiance of international sanctions.
The plans have been revealed as South Korea hopes for the Games to be remembered as a “peace Olympics”.
Kim Jong-un’s sister Kim Yo-jong, the head of the country’s State Security Department, has been blacklisted under US sanctions.
She is also said to oversee the regime’s propaganda department.
Kim Yo-jong will become the first member of her family to step foot in South Korea when she arrives as part of North Korea’s delegation, amid speculation she will deliver a message to politicians from Kim Jong-un.
North Korea’s foreign ministry official Cho Yong-Sam said: “We have no intention whatsoever to meet US authorities during our visit to the South.”
An official familiar with the Winter Olympics planning process told Reuters news agency: “This is a protocol headache.
“How close should the North Koreans and Americans sit, when Washington has been so public about sanctions and pressure against North Korea? And who takes a higher seat?”
The opening ceremony could feature a frosty encounter between the US and North Korean representatives, with Mr Pence set to be accompanied by the father of Otto Warmbier – an American student who died days after being released from a North Korean prison last year.
South Korea’s president Moon Jae-in has said he will meet North Korean delegates for lunch on Saturday, in a sign that tense relations could thaw at the Winter Olympics.
The meeting follows a military parade from North Korea today that was originally scheduled for April.
Footage has shown truckloads of soldiers being driven away from the centre of Pyongyang followed by armoured vehicles and tanks, as huge crowds cheers from the side of the procession.
International observers believe North Korea might be trying to improve relations with South Korea to weaken its relationship with the US.
Vice President Mike Pence said: “We’ll be there to cheer on our American athletes, but we’ll also be there to stand with our allies and remind the world that North Korea is the most tyrannical and oppressive regime on the planet.
“We will not allow North Korean propaganda to hijack the message and imagery of the Olympic Games. We will not allow North Korea to hide behind the Olympic banner the reality that they enslave their people and threaten the wider region.”
Mr Pence had previously said the US is preparing to unveil “the toughest and most aggressive round of economic sanctions on North Korea ever”.
He also told troops in the US’ ally Japan that they are “ready for any eventuality”.