China and Taiwan began talking for the first time in almost a decade on Thursday, though the two often bitter diplomatic rivals are focusing on just a few practical issues and avoiding sensitive political problems.

The only two topics on the agenda are starting direct flights, banned since defeated Nationalist forces fled to the island at the close of the civil war in 1949, and opening Taiwan's doors to masses of Chinese tourists.

Negotiation teams including tourism and transport officials sat facing each other at a long table, rimmed by TV cameras, after a lengthy televised handshake between the two smiling team leaders. They were due to talk all day and sign agreements on Friday.

"We feel the great responsibility of this glorious mission and we must spare no effort in realizing the aspirations of people on the two sides," China's lead negotiator, Chen Yunlin, said at the opening of the talks, according to Xinhua news agency.

Chen and his Taiwanese counterpart, P.K. Chiang, head semi-official bodies set up to talk in the absence of formal ties.

There is not expected to be any mention of signing a peace treaty, of the missiles Taiwan says China has aimed at the island or of any of the other much trickier subjects both sides are ignoring in favour of first solving less contentious matters.

"The main items today are direct weekend charter flights and letting mainland China tourists come to Taiwan," Chiang said, adding he hoped both would "take effect at an early date".

Still, this round should pave the way for regular talks at which harder issues can be discussed, said Alexander Huang, a professor of strategic studies at Taipei's Tamkang University.

"Both sides understand we need to talk about more stuff. We are trying to put all the difficult issues on the shelf this time," Huang said.

The plain-spoken Chiang, 75, is expected to invite Chen to visit Taiwan and propose a long-term cooperation mechanism, Taiwan media reported on Thursday.

Chiang's 19-member team, including senior government officials seldom allowed passage to China, was scheduled to return to Taiwan on Saturday.

FIRST TALKS SINCE 1999

China and Taiwan last spoke formally in 1999, before former Taiwan President Lee Teng-hui enraged Beijing by describing ties as "a special state-to-state relationship".

China has claimed sovereignty over Taiwan since 1949, when Mao Zedong's Communists won the Chinese civil war and Chiang Kai-shek's Nationalists (KMT) fled to the island. Beijing has vowed to bring Taiwan under its rule, by force if necessary.

Yet China, keen to avoid diplomatic rows in the run-up to the Beijing Olympics in August, is expected to take a conciliatory line this week.

Ties have also warmed considerably after the KMT's China-friendly Ma Ying-jeou won the presidency in March.

In a further sign of a thaw, Taiwan's central bank said on Wednesday it would allow financial institutions to sell Chinese yuan to individuals as well as buying the currency from them.

Taiwan's parliament on Thursday approved an amended bill that will help speed the process of allowing wider convertibility between the Taiwan dollar and the yuan signalling improving ties on both sides.

The parliament's approval will let the island's Financial Supervisory Commission and central bank work on plans to let financial institutions buy and sell the Chinese yuan to individuals, which might happen by end-June at the earliest.

But Taiwan's the main opposition Democratic Progressive Party accused the government of courting Beijing because of the ruling party's business connections in China and implored it to "negotiate on equal footing".

"We can't belittle Taiwan's sovereignty, and we can't lose the country's dignity," a party official said in a statement.

There are currently no direct flights between the two rivals except on major holidays, meaning the hundreds of thousands of Taiwanese who live and work in China have to make time-consuming flights via Hong Kong, Macau or other third territories.

"I think it's a good sign," said Beijing university student Jane Chen of the talks. "They can help understanding, and solve problems."

A Taipei resident expressed guarded optimism.

"It's a good start," said Tien Ya-wen, 21, a university law student. "I think it's hard to say that they can sign an agreement due to the differences in the two sides."