Premier Wen Jiabao and Japanese Prime Minister Naoto Kan sat down for an unscheduled discussion on Monday at a conference in Belgium, the first meeting between leaders from the two countries since bilateral relations were strained when Japan seized a Chinese fishing boat in September.
Analysts said the meeting signals strong will on both sides to restore ties to normal.
"The Diaoyu Islands have been Chinese territory since ancient times," Wen stressed during the conversation with Kan, according to a press release by the Foreign Ministry.
Wen, it says, pointed out that protecting and advancing the China-Japan strategic relationship of mutual benefit serves the fundamental interests of both countries and peoples.
The two sides agreed to step up exchanges and intergovernmental communications and hold a high-level meeting at an appropriate time, said the Foreign Ministry statement.
Japan's Kyodo news agency reported the leaders agreed that the "deterioration in bilateral ties over maritime collisions is not desirable" and decided to "hold high-level bilateral talks on a regular basis".
The meeting was not on any public schedule for the eighth Asia-Europe Meeting in Brussels from Oct 4 to 5, which both Wen and Kan were attending. The Associated Press reported the two met for about 25 minutes, sitting on chairs in a hallway.
Despite improved bilateral ties in recent decades, relations plummeted after the Japanese Coast Guard illegally seized a Chinese fishing trawler on Sept 7 in waters off the Diaoyu Islands in the East China Sea, detaining its captain and crew.
China claims sovereignty over the islands, yet its neighbor Japan has in recent decades attempted to assert control and keep Chinese fishermen from entering waters off the islands.
Japanese authorities insisted on performing a so-called domestic judicial procedure against the crew of the seized vessel despite strong protests from the Chinese government and public. The crew and the boat were later released.
Japanese Foreign Minister Seiji Maehara said on Tuesday that he will try hard to mend ties and rebuild a "strategic, mutually beneficial relationship" with China.
Speaking during a luncheon at the Foreign Correspondents' Club of Japan, Maehara welcomed the agreement between Kan and Wen in Belgium to resume high-level talks between the countries.
Earlier in the day, Chief Cabinet Secretary Yoshito Sengoku also expressed his hope for improved relations with China.
"Promoting a strategic, mutually beneficial relationship and improving ties between Japan and China will be positive not only for the two countries but also for other Asian countries and countries around the world, especially for their economies," said Sengoku.
Tokyo signaled Kan's intention to go to Brussels for the Asia-Europe summit in a bid to engineer a meeting with Wen, French news agency AFP reported.
Analysts said the unscheduled meeting on Monday showed neither leader wanted relations to worsen but more work lies ahead.
"The two leaders met to tell each other they don't want ties to continue souring," said Wu Jinan, an expert on Japanese relations with the Shanghai Institutes for International Studies, "but the meeting is only the start of efforts to repair ties."
He said leaders from the two countries may talk about this issue again during a meeting later this month in Hanoi, capital of Vietnam.