Chinese President Xi Jinping and Taiwan's President Ma Ying-jeou shook hands at the start of the talks, which were seen as largely symbolic.
China
views Taiwan as a breakaway province which will one day be reunited with the
mainland.
But
many Taiwanese see it as independent and are concerned at China's growing
influence.
"Both
sides should respect each other's values and way of life," Mr Ma said as
the talks began at a luxury hotel.
Mr
Xi told the Taiwanese leader: "We are one family."
The meeting
"has opened a historic chapter in the cross-Strait relations, and history
will remember today", he added.
The
meeting took place in neutral territory on the sidelines of a state visit by Mr
Xi to Singapore.
Relations
between China and Taiwan have improved under Mr Ma since he took office in
2008, with better economic ties, improving tourism links, and a trade pact
signed.
The
two sides split in 1949 when the Kuomintang lost to the Chinese Communist Party
in the civil war and set up a new government in Taiwan.
What wasn't discussed
Mr
Ma described the talks as "positive and friendly", but no major
agreements or deals appear to have been reached.
Mr
Ma said in advance that the issue of the South China Sea disputes, which has
dominated recent concerns in the region, would not be brought up.
What was discussed
Mr
Ma proposed reducing hostility across the Taiwan Strait, expanding exchanges
and establishing a cross-strait hotline, according to Taiwan's central news
agency.
He
said this was part of consolidating the "1992 consensus" - the
agreement under which both sides recognise the principle of "one
China" but define it in their own ways.
Similar
remarks were made by Mr Xi, who said upholding the consensus would help
"the great rejuvenation of the Chinese nation".
Why are they meeting now?
It
is not entirely clear why the meeting has happened at this time, as neither
side has properly said.
Mr
Ma has built his presidency on closer links with China, so there is a good
reason for him to meet Mr Xi, says the BBC World Service's Asia editor, Michael
Bristow.
There
is also a presidential election in Taiwan in January. Mr Ma might think the
meeting will give a boost to his party's candidate, who is trailing in the
polls, our correspondent says.
China
also has something to gain, and that also concerns Taiwan's election. Mr Xi's
decision to talk reminds Taiwanese voters that China is far friendlier to a
government of Mr Ma's nationalist party than one formed by the opposition,
which leans towards independence for Taiwan.
It
is a calculated gamble for Mr Xi, as China's attempts to influence Taiwanese
voters have previously backfired, our correspondent adds.
Taiwan-China key dates
§ 1949: Chiang Kai-shek's Kuomintang (KMT) nationalists form
their own government in Taiwan after Mao Zedong's communists take power in
Beijing
§ 1971: Taiwan loses its seat at the UN to China
§ 1979: The US establishes diplomatic relations with China
while at the same time committing itself to defending Taiwan
§ 1993: First direct talks between the two sides take place
in Singapore
§ 2005: Beijing brings in a law that makes secession by
Taiwan illegal, at the risk of military action
§ 2008: High-level talks between the two sides resume after
Ma Ying-jeou is elected president
The reaction in Taiwan and China
Growing fears over
China's influence have led to widespread dissatisfaction in Taiwan.
President
Ma's Kuomintang (KMT) Party suffered a crushing defeat in local elections last
year, a result that was widely seen as a rejection of Mr Ma's push for closer
ties with China. In the Taiwanese capital there were protests before the talks
and one group tried to enter the parliament building.
State media in China
heralded the meeting, with an editorial in the Chinese Communist Party
mouthpiece People's Daily calling it a "victory of peace
and rationality".
It
said critics were "displaying jiggery-pokery from a small circle. Such
extremism is bound to be stigmatised".
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