SEOUL. Sept 8: South Korea rejected Wednesday a North Korean demand to halt military exercises with the United States but said it will dispatch delegates for inter-Korean border talks on Friday, reports AP

Restarting Inter Korean dialogue after 10 months of silence is a key US condition for further high-level talks between the United Slates and Communist North Korea.

There was no immediate response from North Korea.

The Koreas earlier had agreed to reopen dialogue, but prospects were clouded by an unexpected North Korean de mand this week that Seoul promise to discontinue yearly war exercises with the United States.

The North also Insisted South Korea stop seeking alliances with other countries to pressure Pyongyang to resolve suspicions about its nuclear

programme.

"I hope your side will come without making conditions." South Korean Prime Minister Hwang In-sung said In a message to hit North Korean counterpart. Kang Song San.

Hwang suggested South and North Korean delegates meet on Friday at the border truce village of Panmunjom for talks on exchanging special envoys.

Such talks could satisfy one condition for a third round of high level talks between the United Stales and North Korea, tentatively scheduled for Geneva later this month. The other condition was that North Korea cooperate with International Atomic Energy Agency Inspections.

The first breakthrough In in-terKorean relations In months came last week when North Korea, changing Its hard-line policy. agreed to discuss nuclear issues with South Korea