URUMQI, June 21 (Xinhua) -- Excavation has begun at the site of a 1,000-year-old city in northwest China's Xinjiang Uygur Autonomous Region, archaeologists said Wednesday.

The excavation will continue for more than two months, while archeologists conduct a thorough investigation using modern technology, said Dang Zhihao, associate researcher with the regional institute of cultural relics and archaeology.

The city, known as Dalt and believed to have been built in Song (960-1279) or Yuan (1271-1368) dynasties, was discovered in 1985, when a farmer unearthed a silver coin while ploughing a field.

Archeologists identified the Persian word "bolat", which means steel, on the coin. Another villager found a piece of ancient steel weighing about 120 kilograms nearby in 1991, leading many to believe that Dalt was the "steel city" Bolat recorded in contemporary books.

The city lies on the Silk Road, with routes to Kazakhstan, Russia, and central Asia.

According to a book written by Liu Yu during the Yuan Dynasty, the city was prosperous and "a large number of houses had colored glaze as the windows."

Dang told Xinhua that an initial excavation last year in an area of about 200 square meters unearthed several hundred relics made of pottery, bronze, and stone.