Taiwan President Chen Shui-bian used his National Day speech on Sunday to call for peace talks with arch foe China and urge adoption of a system to prevent an outbreak of conflict in the narrow strait dividing them.
In an about-face, Chen said the two sides should resume dialogue based on a 1992 understanding over interpretation of Beijing's cherished "one China" principle, raising the prospect of breaking a five-year deadlock.
The Taiwan Strait has become one of Asia's most dangerous flashpoints since Chen's re-election in March. Communist-ruled China is convinced that Chen will push the island it sees as a rebel province towards formal statehood in his second four-year term - a move that Beijing has said would lead to war.
"In the long-term, both sides should formally end the state of hostility across the Taiwan Strait and establish confidence-building measures through consultations and dialogues," Chen told thousands attending National Day festivities in front of the Presidential Office.
A lack of communication had caused misunderstanding and seen the island drift further apart from the mainland, he said.
Chen, who had long said his speech would contain a peace overture, took the opportunity to propose a resumption of talks with Beijing that have been frozen since 1999, saying he was ready to return to dialogue on the principles first agreed.
"I would like to take the initiative to propose that both sides use the basis of the 1992 meeting in Hong Kong, to seek possible schemes that are 'not necessarily perfect but acceptable', as preparation of a step forward in the resumption of dialogue and consultation," he said.
Chen said his government was drafting a plan to facilitate charter flights to the mainland for passengers and cargo and hoped to discuss opening direct transport links.
"The Republic of China and the People's Republic of China - or Taiwan and China - can seek to establish political relations in any form whatsoever," he said in his closely watched speech.
"We would not exclude any possibility, so long as there is the consent of the 23 million people of Taiwan," Chen said.
Chen said both sides should seriously consider arms control and seek to establish a "code of conduct" as the tangible guarantee of permanent peace in the Taiwan Strait.
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