BEIJING - China and India agreed to maintain peace and tranquility of the border areas before a final settlement on the issue.

China's State Councilor Dai Bingguo and India's National Security Advisor Shiv Shankar Menon co-chaired talks here on Monday.

Both sides agreed to create a favorable atmosphere and conditions for the final settlement of the border issue and agreed that it should not affect the positive development of China-India ties, according to a Chinese Foreign Ministry statement.

China and India experienced a border conflict in 1962. The two countries launched the mechanism of meetings between special representatives on border issues in 2003.

The two sides confirmed they will speed up work to further narrow differences, on the basis of peace and friendship, equal consultation, mutual respect and mutual understanding, according to the statement.

On bilateral relations, Dai said that the Chinese side is committed to developing long-term, stable, good-neighborly, friendly and cooperative relations with India.

China's policy on India is in line with the foreign policy thinking stated by the 18th National Congress of the Communist Party of China, according to Dai.

The interests of China and India are linked to each other and the two's fates are related, Dai said.

He noted that as two large emerging countries, both China and India are facing the historic task of developing an economy and improving people's livelihood.

China always regards its relations with India as one of its most important diplomatic relations, according to Dai, who stressed that China sincerely wants to be India's strategic partner on the basis of equality, mutual trust, inclusiveness, mutual learning, cooperation and mutual benefit.

Bilateral cooperation in the last 10 years has witnessed remarkable results in various fields, the state councilor said, noting that China and India have explored an effective way to get along with each other.

The two countries should have a clear idea about some parties' intentions of undermining bilateral ties. They should also remember that there is more consensus than dispute, and more cooperation than competition, between China and India, said the state councilor.

As advocates of the Five Principles of Peaceful Coexistence, both China and India have sufficient wisdom and capabilities to handle bilateral ties, make more efforts for mutual benefit and prevent "noise" from diverting friendly cooperation and common development, he added.

Every step forward in the two countries' development as well as bilateral ties will contribute to the peace, security and cooperation in the world, Dai said.

The experience of handling and controlling disparities between China and India has made an important contribution to enriching the theories and practices of international relations, Dai said.

Menon said that India and China share common views on many major issues and their consensus is far greater than differences. Developing relations with China is one of the priorities of India's foreign policy, he said

He stressed that India will not participate in any attempt to contain China.

The Indian side hopes to further strengthen bilateral high-level exchanges, maintain dialogue and consultation, expand cooperation in trade, investment, service and other fields, promote interoperability of infrastructure and enhance border trade, according to Menon.

The two sides also exchanged views on international and regional issues.

Foreign Minister Yang Jiechi also met with Menon on Monday, according to the Foreign Ministry.