Chinese President Hu Jintao on Monday called for a peace agreement with long-time rival Taiwan, but insisted independence for the island would never be tolerated.
"We would like to make a solemn appeal," Hu said at the opening of the ruling Communist Party's five-yearly Congress.
"On the basis of the one-China principle, let us discuss a formal end to the state of hostility between the two sides, reach a peace agreement, construct a framework for peaceful development of cross-strait relations and thus usher in a new phase of peaceful development."
However Hu's call was quickly rebuffed by Taiwan, which split with China in 1949 after a civil war and has since ruled itself independently.
Taiwan's cabinet-level Mainland Affairs Council in a statement highlighted Hu's continued emphasis on the 'one-China' principle, which states that island would be incorporated into mainland Chinese rule.
"Instead, we insist that democracy is the basis of peaceful development across the Strait," the statement said.
"Taiwan's sovereignty is owned by the 23 million in Taiwan and its future should be decided by themselves."
Hu's speech did not carry direct references to using force in bringing about Taiwan's reunification with the mainland, as China has done in the past.
In 2005, China's parliament passed an anti-secession law which provided Beijing with the legal framework for retaking the island by force.
However, Hu did warn that Taiwan's "independence forces" were jeopardising cross-strait relations, in an apparent reference to President Chen Shui-bian's plan to hold a referendum on seeking UN membership under the name Taiwan.
"China's sovereignty and territorial integrity brook no division, and any matter in this regard must be decided by the entire Chinese people, including our Taiwan compatriots," he said.
"China will never allow anyone to separate Taiwan from the motherland in any name or by any means."
Tensions have risen across the Taiwan Strait recently amid pro-independence rhetoric by Chen, who last month failed in his latest bid to secure UN membership for the island.
During an Asia-Pacific summit in Sydney last month, Hu told US President George W. Bush that Taiwan's referendum plan had propelled the cross-strait situation into a "possibly dangerous period".
Chen then warned in a national address last week that China's military build-up was threatening world peace, and urged it to halt military exercises targeting the island.
Hu's latest remarks should not be interpreted as a major shift in China's policy, according to Kou Chien-Wen, an Asia-Pacific expert at Taiwan's Chengchi University.
"This is not the first time Hu has called for a cross-strait peace mechanism, and like before, he has based it on the acceptance of the 'one-China principle'," Kou said.
"But Taiwan's ruling party has refused to accept the 'one-China policy' and insists that there are two countries involved, China and Taiwan."
Kou acknowledged that Hu did not repeat the war-like rhetoric.
"But by mentioning the 'one-China principle' shows that he is not renouncing the use of force," Kou said.
During his speech, Hu also appeared to reach out to those in Taiwan who oppose Chen, promising policies beneficial to the island and which would protect the huge investments on the Chinese mainland by Taiwan enterprises.
He also called for a resumption of direct trade, travel and mail links between the two sides.