He said the two sides must 'quickly resume cross-strait talks to resolve various problems in a pragmatic way under the 1992 consensus' in order to achieve cross-strait peace.

Mr Hu called for the two sides to build mutual trust, seek common ground to set aside differences in order to achieve a situation conducive to development of cross-strait relations and peace.

Noting the latest political development as a positive sign that provides good momentum for improvement of cross-strait relations, Mr Hu said people on both sides of the Taiwan Strait must work together, given that they are 'compatriots sharing the common fate' and that they are members of the 'big family of the Chinese race'.

He was referring to the return to power of the mainland-friendly KMT, whose candidate, Ma Ying-jeou, won the March 22 presidential election. His May 20 inauguration will end eight years under Chen Shui-bian of the pro-independence Democratic Progressive Party. Beijing refused to deal with him because of his pro-independence stance.

In late March, Mr Hu publicly acknowledged the concept of the 1992 consensus as a basis for the two sides to resume talks during a phone conversation with his US counterpart, George W. Bush.

The consensus, reached in 1992 by the two sides in Hong Kong, acknowledges that there is only one China, but each side was allowed to have its own interpretation of what that 'China' means. For Taiwan, it would be the Republic of China, its official title, and for Beijing it would be the People's Republic of China. The outgoing government of the pro-independence DPP, however, has disputed the existence of such a consensus, making resumption of talks impossible.

But with Mr Ma's victory, resumption of talks have become possible because both the KMT and Mr Ma have agreed that the two sides can hold talks under the 1992 consensus.

Mr Lien said yesterday that the two sides should grasp the opportunity to increase their exchanges in the economic, cultural, education, social and security areas to facilitate peaceful cross-strait development.

Mr Hu also indicated his assertion of the function of the two parties in developing ties when he said: 'Our two parties should have further and closer co-operation to continue to promote cross-strait ties and development.'

Mr Lien made history in 2005 with an unprecedented visit to the mainland, dubbed the 'journey of peace', for reconciliation between the two parties. Since then, the two parties have held forums to find ways to promote cross-strait exchanges.

This is Mr Lien's fourth trip to Beijing and fourth meeting with Mr Hu. Despite his frequent visits, Mr Lien is still given high-profile treatment by Mr Hu, who hosted a dinner for him at his residence in Beijing.

Mr Lien, who arrived on Monday for a nine-day visit, also attended a ceremony yesterday in Beijing's Olympic Park that unveiled a replica of a sculpture symbolic of cross-strait peace created by the late Taiwanese artist Yuyu Yang.

Beijing Mayor Guo Jinlong invited Mr Lien and his wife, Lien Fang Yu, to attend the Beijing Olympics' opening ceremony on August 8. Mr Lien's aides later said he would accept the invitation.