China and the United States Wednesday hailed defence talks here as a step forward in mutual understanding and agreed to meet again in July to discuss how to avoid a repeat of recent high-seas standoffs.

However, in an illustration of lingering tensions, China also called on the US to cancel an arms sale to Taiwan and stay away from waters where this year's maritime confrontations took place.

The talks were held amid military tensions between the two giants linked to those issues, as well as US concern that China was being opaque about its long-term military build-up.

"These talks took us another step down the road towards more openness and transparency," US under-secretary for defence Michele Flournoy told reporters after the two days of meetings ended.

"The United States does not view China as an adversary. We think that as our relationship develops there will be a great deal on which we can act as partners."

Lieutenant General Ma Xiaotian, deputy chief of the People's Liberation Army general staff and China's delegate to the talks, also said during a separate briefing that the talks would have a "positive influence" on defence ties.

But he reiterated China's demand for a planned 6.5-billion-dollar US arms sale to Taiwan -- proposed under the Bush administration -- to be scrapped, calling such deals "the greatest obstacle to Sino-American relations."

China briefly cut off military exchanges with the United States in October 2008 over the arms package for Taiwan, a self-ruled island that China claims.

Flournoy said the Obama administration had not yet made a decision on the sale.

Ma also said China "reaffirmed its opposition to ships and aircraft conducting surveillance activities in the exclusive economic zone of China."

The two countries' vessels have been involved in a series of incidents this year, triggering US accusations of "aggressive" Chinese behavior in international waters.

China, meanwhile, has complained the US navy infringed its maritime territory.

The two sides agreed to deal specifically with the issue in talks next month, Flournoy said.

"The US, under international law, exercises its freedom of navigation in various part around the world, including the Asia-Pacific, given our vital interests here.

"We're putting the emphasis on taking care to avoid any unwanted incidents," Flournoy said.

She called next month's session "a sign of our willingness to try to work things through in a very pragmatic and cooperative way."

US officials said they did not yet know where those talks would take place.

The two sides also discussed North Korea's recent nuclear sabre-rattling but neither official mentioned any breakthroughs.

A Pentagon official, who spoke on condition of anonymity, told reporters in Washington over the weekend that the United States had hoped to nudge China to use more of its leverage on North Korea to bring it to heel.

North Korea has alarmed the international community by vowing to build more nuclear bombs after the UN slapped new sanctions on the reclusive state for carrying out its second nuclear test and several missile launches last month.

Ma said he called during the talks for the "parties concerned to take all measures to control the situation and resolve the problem through dialogue and consultation."

China, which borders North Korea and is the isolated state's closest ally, has steadfastly favoured cautious diplomacy with Pyongyang. However, it supported the new UN sanctions resolution.