New Delhi - India and China held talks Saturday and agreed to build "trust and understanding" in their bilateral ties, seeking to put behind a diplomatic spat, news reports said.

Indian Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao held talks on the sidelines of the Association of Southeast Asian Nations (ASEAN) and East Asia summits in Thailand.

The two leaders held a "productive meeting" covering bilateral, regional and international issues, the IANS news agency reported quoting official sources.

The pair avoided contentious issues behind the recent tension - including the disputed north-eastern territory of Arunachal Pradesh - but pledged not to let differences derail bilateral ties, it said.

"We have reached important consensus on promoting bilateral ties, and I believe that our two countries maintain a good relationship in the future, which conforms with the interests of the two countries," Wen was quoted by the IANS as saying at the beginning of the talks.

Singh meanwhile said he had "good discussions" with Wen on how to promote their bilateral strategic and cooperative partnership.

According to senior Indian Foreign Ministry official N Ravi, Singh said both sides should take measures at the political and diplomatic level to build a strong relationship.

"Neither side should allow issues to act as impediment in the growth of our relations," Singh said.

Wen concurred with Singh's assessment that "our relations should be properly handled through discussions and should not become impediments in bilateral relationship", the report said.

India and China have a long-standing boundary dispute involving large areas along their 4,000-kilometre border, a bitter legacy of the 1962 war between the two countries.

China has laid claim to large parts of India's Arunachal Pradesh state, which New Delhi rejects. The meeting of the two leaders came amid fresh tension between the Asian giants over the territory.

Beijing had objected to Singh's visit there earlier this month, triggering sharp reaction from India which asserted that the state was an integral part of the country.

China has also opposed Dalai Lama's proposed trip to the famous Tawang monastery in Arunachal Pradesh in November.

It accuses Dalai Lama, who fled to India in 1949 after a failed uprising against Communist rule, of indulging in anti-China activities and trying to "split" Tibet from the country.

New Delhi in turn criticized China's investments in infrastructure projects in Pakistan-administered Kashmir.

The Himalayan region of Kashmir is a disputed area which both India and Pakistan separately administer but claim in its entirety.

Other issues which recently led to the war of words between India and China include Beijing's move to issue separate visas to passport holders from India-administered Kashmir. (dpa)