In a report to the annual legislative session's opening ceremony, Wen hailed a significant improvement in ties and a major reduction in tensions over the past year between China and the self-governing island across the Taiwan Strait that Beijing claims as Chinese territory.

“Positive changes occurred in the situation in Taiwan, and major breakthroughs were made in cross-strait relations,” Wen said.

Beijing was ready to hold talks to “create conditions for ending the state of hostility and concluding a peace agreement” between the sides, he said.

Wen's remarks to the National People's Congress were a near word-for-word reiteration of offers made by president and Communist Party leader Hu Jintao in a Dec. 31 address. Relations have improved dramatically since Taiwan's President Ma Ying-jeou took office last year with a mandate to reduce tensions and strengthen economic ties between the sides.

Wen also referred to Taiwan's long ambition to participate in international organisations such as the United Nations, although he insisted the baseline criteria remained.

“We are ready to make fair and reasonable arrangements through consultation on the issue of Taiwan's participation in the activities of international organisations,” Wen said.

But he said such participation would have to come under the “one-China principle”, which maintains that Beijing is the sole legitimate government of all of China, including Taiwan.

Wen also said China would work to improve already lucrative economic ties between the two sides, with the aim of jointly overcoming the global economic crisis, and vowed to provide financial and investment support for Taiwanese businesses operating on the mainland. Late last month, officials said Taiwan and China would sign agreements to collaborate on finance and reducing crime.

“We will accelerate normalisation of cross strait economic relations and facilitate the signing of a comprehensive agreement on economic cooperation,” Wen said.

Wen gave no additional details on the content of a peace agreement or what the talks on political and military issues would include. However, the tone of his remarks was far more conciliatory than the typically hawkish references to Taiwan contained in previous addresses to the congress.