The Asian economic giants, two of the world's biggest energy importers, have been sparring for years over potentially lucrative gas fields in an area where their 200-nautical-mile exclusive economic zones overlap, and had already held talks on the issue twice in the past 12 months.

The Japanese side proposed joint gas and oil development in the area straddling both sides of what Tokyo says is the maritime boundary, said Japan's chief delegate Kenichiro Sasae.

"The Chinese side responded that it would sincerely study the proposal and state its view at the next round in Beijing," said Sasae, head of the foreign ministry's Asian and Oceanian affairs bureau.

China does not recognize the boundary, while Japan argues that its neighbor could tap Japanese resources even if it digs from its side.

The dispute heightened last month after Japan said it had spotted flames spouting out of a Chinese drilling facility on China's side of the line. China began test-drilling unilaterally in the East China Sea in 2003.

On the eve of the talks, Beijing said it had sent warships to the disputed area. Chinese warships were also sighted near the gas field for the first time on September 9, two days before Japan's general election. China said they were on a routine exercise.

A Japanese survey in 1999 estimated that the disputed field held a massive 200 billion cubic meters (seven trillion cubic feet) of gas.