Taiwan and China agreed for the first time Thursday to set up permanent offices in each others' territories, as the two sides met for their first formal talks in more than a decade, an official with one of the delegations said.

The agreement to set up the offices, which will co-ordinate continuing contacts, was reached during talks Thursday morning in Beijing, a spokeswoman for Taiwan's Straits Exchange Foundation said, speaking on routine condition of anonymity.

She said a formal announcement would be made later.

The agreement came on the first day of meetings between the foundation and its mainland counterpart, the first formal talks between the sides since 1999.

Pang Chien-kuo, a member of the Straits Exchange Foundation, told China's official Xinhua News Agency the offices would "facilitate people's exchanges and traveling across the Strait."

The announcement injected a whiff of drama into an otherwise relatively mundane talks agenda that seeks mainly to finalize agreements on charter flights and tourism to build confidence between the long-estranged rivals.

Taiwan's delegation also planned to discuss what additional help the island could provide for China's earthquake relief efforts.

The talks are scheduled to run through Friday at a state guesthouse in western Beijing.

'Established mutual trust'

Beijing's administration, which seized power on the mainland in 1949, considers Taiwan part of its territory and refuses to recognize the government in Taipei. As a result, this week's negotiations are being carried out by semi-official organizations.

The negotiations should lay the foundation for "a long-term peaceful relationship between the two sides," said Chiang Pin-kung, who chairs Taiwan's Straits Exchange Foundation.

"The two sides have … established mutual trust," he added.

His counterpart, Chen Yunlin, head of Beijing's Association for Relations Across the Taiwan Strait, said the public on both sides was counting on the talks to produce results and alter the often combative tone between the two governments.

"Whether cross-strait relations can improve, depends on whether our negotiations can proceed smoothly," Chen said.

China and Taiwan have have periodically looked for ways to build trust between the governments amid soaring trade and investment. In the early 1990s, they agreed to hold talks, but China ultimately stepped away from them.

Chiang has hope for this week's talks, saying he expects to sign an accord opening the way for 36 charter flights to cross the 100-mile-wide Taiwan Strait every weekend. Taiwan has banned direct scheduled flights since the 1949 division.

The expanded flights will be enough to shuttle several hundred thousand Chinese tourists to Taiwan every year. Charter flights are now limited to four annual Chinese holidays.