Peruvian Prime Minister Carlos Ferrero has announced that Peru is canceling free-trade talks with Chile. It is the latest twist in a diplomatic dispute over allegations dating back 10 years.

The latest dispute between Peru and Chile involves alleged Chilean arms sales to Ecuador during its war with Peru in the 1990s.

Chile has acknowledged it sold arms to Ecuador before the brief war began in 1995. Peruvian Prime Minister Carlos Ferrero said he was disappointed that Chile has never apologized for the sales, which Peru maintains continued during the war over a section of the Ecuador-Peru border.

Mr. Ferrero says Peru expected from Chile an "explicit apology for what happened, apologies that should have come after the fact that Chile sold and delivered arms to Ecuador."

He went on to announce that Peru is canceling free trade and confidence building talks with Chile due to the increasing tensions. It was not clear if a meeting between the countries' foreign ministers scheduled for later this month would go ahead.

Chilean officials responded by issuing a statement saying they were willing to sit down with their Peruvian counterparts to discuss a resolution.

Animosity between Peru and Chile predates the war with Ecuador. Some Peruvians harbor ill-will toward Chile over a border war between the two South American neighbors more than 100 years ago.

Peru was also riled by a travel video released recently by a Chilean airline that portrays Peru as poor and filthy.

Earlier this week, Peru refused to endorse Chile's candidate for secetrary-general of the Organization of American States.