Seoul - South Korea's state-run Korea Development Bank (KDB) said Wednesday that it had abandoned talks about acquiring a stake in the ailing US investment bank Lehman Brothers.

"Korea Development Bank has stopped negotiations with Lehman Brothers because of differences over the conditions of a transaction," a KDB spokesman said in Seoul.

The decision was also made in consideration of the financial markets at home and abroad, he added.

Jun Kwang Woo, chairman of South Korea's Financial Services Commission, called on KDB Monday to be cautious over a Lehman Brothers deal in regards to the bank's privatization plans.

Seoul - Shares surged more than 5 per cent Monday on the Seoul Stock Exchange as investor sentiment was boosted by the US government decision to bail out struggling mortgage giants Fannie Mae and

Beijing - Envoys from South Korea and Japan discussed North Korea's nuclear weapons programme on Friday, amid uncertainty over whether Pyongyang is preparing to reassemble key facilities.

Officials said US chief negotiator Christopher Hill would hold trilateral talks with the South Korean and Japanese envoys on the nuclear programme on Friday evening.

Seoul - South Korea said Thursday it had confirmed North Korea has started to reassemble its Yongbyon reactor, and expressed concern about the development, urging North Korea to stop turning back the "progress of denuclearization."

"We've confirmed North Korea has actually started the work to reassemble its reactor. And we urge North Korea to stop the work and not to further worsen the situation," South Korea's Foreign Ministry said in a statement released overnight.

Seoul - The South Korean won was briefly lifted against the US dollar in morning trade on Wednesday, apparently due to suspected dollar-selling intervention by the government.

The slide was temporarily stopped after the South Korean currency fell to a session low of 1,159 won at one point late Wednesday morning. It is suspected that earlier losses were cut as foreign exchange authorities poured in an estimated 1.5 billion dollars.

Seoul - North Korea may accept food aid from South Korea if the aid comes from a non-governmental organization, the South Korean Ministry of Unification said Wednesday.

North Korea has declined any food aid from South Korea since inter-Korean relations were further strained when a South Korean tourist was shot to death by a North Korean soldier in July.

"North Korea expressed its intent to receive food but under the condition the donor is a certain South Korean NGO," ministry spokesman Kim Ho-Nyun said in a press briefing.