The six-point agreement between People First Party chairman James Soong Chu-yu and Chinese Communist Party chief Hu Jintao increases the pressure on Taiwanese President Chen Shui-bian to resume talks with the mainland, according to analysts.
It also marks a turning point in cross-strait relations, they said, with Beijing about to step up its charm offensive to win over public opinion on the island and around the globe.
Li Yihu, a professor in Peking University's school of international relations, said Beijing was trying to force Mr Chen and his ruling Democratic Progressive Party back to the negotiating table.
Professor Li said he was cautiously optimistic about the prospects for an improvement in cross-strait relations because the new formula to facilitate a resumption of talks reached in talks between Mr Hu and Mr Soong gave Mr Chen considerable room for manoeuvre.
On Thursday, Mr Soong and Mr Hu proposed a 'two sides, one China' formula as a basis for a resumption of top-level talks.
The 'two sides, one China' wording redefined a 1992 agreement between the semi-official bodies representing Beijing and Taipei that both the island and mainland form 'one China'.
Mr Chen, who has twice been elected president on a pro-independence platform, has rejected the new formula.