US President George W. Bush said he was confident China stood "side by side with the American people" during US military strikes on Afghanistan.
But Chinese President Jiang Zemin cautioned the US to "avoid innocent casualties".
After his first meeting with Jiang, Bush told reporters he was satisfied with China's cooperation on intelligence gathering and pursuing financial assets of al-Qaeda, the group believed to be behind the September 11 attacks on the World Trade Center and Washington, and its founder, Osama bin Laden.
"There was no hesitation, there was no doubt they'd stand with our people during this terrible time," Bush said at a joint news conference.
For his part, Jiang said he was "pleased to note that recently there's been an improvement in our ties".
The leaders met on the eve of the Apec summit.
Bush mentioned Taiwan, considered a renegade province by China, and said Beijing should preserve regional stability.
Taiwan is boycotting the summit to protest against Beijing's decision to bar a presidential adviser, Li Yuan-zu, from representing the island there. Beijing insists Taiwan must send a representative with experience in economic, not political, affairs.
Jiang seemed to distance himself from Bush on the issue of Taiwan, saying he hoped the matter would be "properly addressed" by the US.
But the Taiwan delegation was preparing to walk out last night.
Taiwan President Chen Shui-bian called the failure to send the island an invitation to this weekend's summit of 21 Asia Pacific Economic Cooperation (Apec) economies a "total disregard of protocol".
The island's decision to boycott Apec came a day after China's Foreign Minister humiliated Taiwan's Economics Minister, cutting him off at a ministerial news conference and saying the debate over the island's representation was a "waste of time".
Taiwan's delegates already in Shanghai for pre-summit meetings would head for home today, said Vice Economic Affairs Minister Steve Chen. "We regret this situation and we would like to lodge our strong protest against this irrational behaviour."
China's Apec spokeswoman, Zhang Qiyue, said Beijing was following protocol established when Taiwan joined the group in 1991.
The highly public row has marred the Apec forum, where members are seeking to build a consensus on measures to fight terrorism in the wake of the attacks on the United States and to combat the global economic slump.
It has also become a major embarrassment to host China, which has sought to showcase its financial capital, Shanghai, to foreign investors and generate positive publicity for the highest profile meeting of foreign leaders in modern China.
"This year's Apec is very important," said Zhang. "Thus I think all the Apec members don't wish such a crucial meeting to be disrupted by a dispute that, in the first place, should not have happened."
- AGENCIES
Full coverage: Apec 2001
Apec China 2001 official site
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China stands by US, says Bush
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