(LEAD) S. Korea spurns N. Korea's proposal for peace

SEOUL, July 1 (Yonhap) -- South Korea on Tuesday turned down North Korea's latest peace overture, saying Pyongyang must first demonstrate its commitment to ending its nuclear weapons program.

The response came a day after the North's powerful National Defense Commission (NDC) proposed that the Koreas suspend all military hostilities, including joint South Korea-U.S. military drills, and stop slandering each other.

"North Korea's proposal lacks sincerity and is preposterous as it blames South Korea for growing inter-Korean military tensions and strained bilateral ties," South Korea's unification ministry said in a statement.

"Pyongyang should demonstrate its sincerity on resolving the nuclear issue -- the fundamental threat to peace on the Korean Peninsula -- if it truly wants peace."

North Korea has been under pressure for more than a decade from South Korea, the United States and other regional powers to abandon its nuclear program in return for political concessions and economic aid.

But North Korea has indicated it has no intention of giving up its nuclear programs as it views them as a deterrent against what it claims is Washington's hostile policy against it.

The NDC reasserted the country's policy of developing its economy and nuclear arsenal in tandem, calling its nuclear deterrence "a valuable common asset of the nation."

   Seoul and Washington have warned that the North's dual-track policy is a dead end for the communist country.

The North's commission also called on South Korea to cancel the military drills to create an atmosphere friendly to inter-Korean dialogue, as well as for the 2014 Asian Games.

North Korea has said it will send athletes to the regional sporting event to be held in the western South Korean city of Incheon in September and October.

The North claims the joint military drills are a rehearsal for a nuclear war against it. Seoul and Washington have said the routine drills are defensive in nature.

Seoul and Washington are slated to hold Ulchi Freedom Guardian, an annual joint combat readiness exercise, in August regardless of the North's overture, said Army Col. Wi Wong-seop, vice defense ministry spokesman.

The unification ministry, which handles inter-Korean affairs, accused North Korea of shifting the blame to South Korea for frayed inter-Korean relations.

It said North Korea continued slander against South Korean President Park Geun-hye and threatened the country.

Also Tuesday, Unification Minister Ryoo Kihl-jae said in a parliamentary session that it is North Korea that has resumed slanderous remarks against South Korea, not the other way around.

In February, the two Koreas held their first high-level talks in years and agreed to stop slandering one another to promote mutual understanding and trust.

However, the North has since made a series of sexist swipes at Park, including calling her a "despicable prostitute."

   The North's latest offer came just days after the North fired several short-range missiles into the sea off its eastern coast.

It also came just days before Chinese President Xi Jinping makes a two-day trip to Seoul on Thursday for talks with Park on issues that include North Korea's nuclear program.

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