From the Southwest.
A staff officer who left the lines yesterday afternoon reports that a flag of truce had been sent in by Gen. Rosecrans. After considerable correspondence Gen. Bragg. consented to an exchange of the wounded. They have about 600 Confederates and we have 5,000 Yankees. The exchange is conditional.
There is no change in the condition of affairs in front of Chattanooga. Rosecrans receives his supplies by wagon trains from Stevenson.
A report reached Dalten yesterday that Gen. Sam. Jones had occupied Knoxville, and that Burnside had retested towards Cumberland Gap. These reports are credited in official circles.
Major Rice raves, Chief of Artillery of Gen. Breckinridge's Division, died on Sunday from wounds received at Chickamauga.