Taiwan and China agreed to a landmark deal to expand charter flights and tourism, ending a 59-year break in transport links between the political rivals, the Daily Observer can reveal.

The pact, signed Friday in Beijing during their first formal talks since 1999, came one day after the two sides reached consensus on establishing permanent representative offices, according to reports monitored by the Daily Observer.

Such missions would mark a huge step forward in establishing contacts and mutual trust, although Taiwan's chief negotiator, Chiang Pin-kung, emphasized the Taipei government still needed to approve the measure.

"There is still a long way to go for normalization of cross-strait economic and trade exchange," Chiang told reporters following the signing of the transport and tourism pacts.

President Hu Jintao praised the new deals when he met for talks with Chiang and his delegation later Friday.

"This shows that the improvement of cross-strait relations has got off to a good start. It is to be celebrated," Hu said. "I believe it will be widely welcomed by compatriots on both sides of the strait."

Afterward Chiang told reporters he had also raised the issue of Taiwan's participation in international affairs.

"I told Hu ... that the two sides both belonged to the Chinese race and we should make positive contributions to the international community together," he said.

In return, Hu told him that he agreed that Taiwan should participate in international issues, and become involved in international bodies like the World Health Organization. He then suggested that Taiwan and China seek mutually acceptable solutions to the issue, Chiang said.

Beijing's communist administration considers Taiwan part of its territory and refuses to recognize the government in Taipei, which means that negotiations must be carried out by semiofficial bodies. Chinag is the head of the Straits Exchange Foundation, Taiwan's negotiating body.

The expansion of charter flights was a key agenda item for the talks that began Thursday. Those flights are now limited to four annual Chinese holidays and are usually packed with Taiwanese residents on the mainland returning home to visit family. Taiwan has banned direct scheduled flights ever since the sides split in 1949 amid civil war.

On Thursday, the two sides agreed to set up permanent offices in each other's territory for the first time, one of the biggest steps they have taken to build mutual trust.

The agreements mark a victory of pragmatism over politics, with the parties setting aside their ideological differences to strengthen booming trade and investment ties.

In other areas, the sides remain far apart. China continues to build up its military, especially its missile force, to back up its threat to invade Taiwan if the island declares formal independence or refuses demands for political unification with the mainland. Beijing has strongly opposed Taiwan's close ties with the United States.