Taiwanese President Chen Shui-bian has called for a demilitarised zone to be set up between Taiwan and China.
President Chen has refused to hold talks with pre-conditions
Mr Chen said troops and missiles should be removed from the area as a prelude to talks between the two sides.
The president also repeated a call for Taiwan and China to swap envoys and develop relations - absent since Taiwan split from China in 1949.
China regards Taiwan as part of its territory and has repeatedly threatened to take it over by force.
The mainland has been angered by Mr Chen's plan to hold a referendum next month on Taiwanese defence and relations with China - a move which China fears could be a step towards Taiwan formally declaring independence.
President Chen called for the "establishment of a demilitarised zone
(including removal of combat personnel, equipment and deployed
missiles), creating a buffer zone in terms of time and space to
He did not say where the zone might be.
One of two questions in the planned 20 March referendum will ask Taiwanese if the island should bolster its defences if China refuses to redeploy its missiles aimed at Taiwan.
Mr Chen also called for "representatives stationed in Taipei and Beijing to facilitate communication and conveyance of messages".
China has previously rejected holding talks with Taiwan until it recognises it is part of mainland China.
The Taiwanese leader has rejected talks with pre-conditions.
The BBC's Taiwan correspondent Chris Hogg says President Chen faces a tough battle for re-election next month.
He says Mr Chen is under pressure to show he is a pragmatic leader who can deal with the Chinese.