SEOUL, South Korea - North Korea demanded Monday that the U.S. call off its annual military exercises with South Korea, a report said as rare talks between the North and U.N. forces ended without clear progress on defusing tensions.

South Korea's Yonhap news agency said the North made the demand during talks with the U.S.-led U.N. Command at the Korean border village of Panmunjom, held for the first time in nearly seven years. It came amid fears North Korea is gearing up to test-launch a missile believed capable of reaching U.S. territory.

Yonhap quoted an unidentified South Korean military official as saying the North warned that the upcoming maneuvers would "further stir up" tensions on the Korean peninsula.

The report said the U.N. Command insisted that the exercise -- involving 26,000 American troops, an unspecified number of South Korean soldiers and a U.S. aircraft carrier -- is purely defensive and not preparation for an invasion as the North claims.

North Korea has routinely condemned the regular U.S.-South Korea military drills as preparation for an invasion, although the allies have said they have no intention to attack.

Both the U.N. Command and the South Korean Defense Ministry said they couldn't confirm Yonhap's report.

The U.N. Command said only that the sides discussed "measures to reduce tension and introduce transparency" and agreed to further meetings during a half-hour of talks.

"The UNC welcomed this discussion with North Korea which holds the prospect for building trust and preventing misunderstandings between both sides," the statement quoted the command's chief delegate Maj. Gen. Johnny Weida as saying.

Command spokesman Kim Yong-kyu declined to comment whether the potential missile launch was discussed during the talks.

Russian Foreign Minister Sergey Lavrov urged restraint from all sides, Russian news agencies reported. He also called for swift resumption of six-nation talks on North Korea's nuclear disarmament, saying bilateral disputes should not be allowed to get in the way.

North Korea asked last week for the hastily arranged talks with the U.N., saying it wanted to discuss ways to reduce tensions, according to the U.N. Command, which monitors a cease-fire that ended the 1950-53 Korean War.

North Korea and the U.N. Command have held 14 rounds of such high-level military talks "when necessary" since 1998, according to Kim, the command spokesman.

Relations between the two Koreas are at their lowest point in a decade, with North Korea bristling over South Korean President Lee Myung-bak's hard-line policy toward Pyongyang. The tensions have intensified in recent weeks amid reports that North Korea is preparing to test a long-range missile.

Analysts say communist North Korea also wants to capture President Barack Obama's attention at a time when international disarmament talks with the regime remain stalled.

Neighboring governments believe the satellite claim may be a cover for a missile launch and have warned the regime such a move would invite international sanctions. North Korea, which in 2006 tested a nuclear weapon and unsuccessfully fired a long-range missile, is banned from engaging in any ballistic missile activity under a U.N. Security Council resolution.

Obama is dispatching his envoy for North Korea, Stephen W. Bosworth, to Asia this week to discuss the nuclear dispute. Bosworth plans to meet with officials in China, Japan and South Korea, and will consult separately with Russian officials, the State Department said.

The two Koreas remain divided by the world's most heavily fortified border. Although other nations contributed forces during the Korean War, U.S. troops are the only foreign combat forces left on the peninsula. The U.S. has 28,500 troops in South Korea