Taiwan and China have recently begun direct daily flights
President Hu Jintao of China has called for talks with Taiwanese leaders to ease military and security tensions.
In a speech to Communist Party leaders in Beijing, President Hu said the two sides should exchange views on military issues and a mechanism of mutual trust.
He called for a pragmatic approach to relations with Taiwan, which China views as a renegade state.
Relations between them have improved markedly since President Ma Ying-jeou came to power in Taiwan in May.
Mr Hu appeared, for the first time, to appeal directly to Taiwan's opposition party to give up its stance for independence.
He also hinted at China's help for Taiwan to join international organisations.
Mr Hu called for a pragmatic approach to the political relationship, and suggested talks on military matters.
"The two sides can engage in... contacts and communications on military issues when appropriate, and discussions on building a trust mechanism for military safety," he said.
"We call on both sides to negotiate on ending hostilities and reaching a peace agreement on the principle of one China," Mr Hu said.
He added that Taiwan's involvement in international events "could be reasonably arranged through pragmatic negotiations under the condition of not causing 'two Chinas' or 'one China and one Taiwan'."
Taiwan's new president Mr Ma has made participation in international organisations a key goal of his presidency, and has openly pushed to join the World Health Assembly, a United Nations body.
In his speech on Wednesday, Mr Hu also referred to Taiwan's main opposition party, the Democratic Progressive Party (DPP), which is known to be more pro-independence than Mr Ma's Nationalist Kuomingtang party (KMT).
If Taiwan's opposition Democratic Progressive Party (DPP) gives up "splittist activities" and "changes its attitude", it would elicit a "positive response", Mr Hu said.
China has claimed sovereignty over self-ruled Taiwan, its "one China" policy, since the end of the Chinese civil war in 1949, and has said it will bring the island under mainland rule, by force if necessary.
The DPP rejected Mr Hu's comments, with senior legislator Tsai Huang-lang telling Reuters: "The China Communists want to vanquish the DPP. We can't possibly give up Taiwan independence. Taiwan's sovereignty and independence are core values of the party."
Relations across the Taiwan Strait, once one of the hottest flashpoints in Asia, have improved since the Kuomintang was returned to power in May.
When Mr Ma took over from former President Chen Shui-bian, he accepted a goodwill gift from China of two pandas - a gift which Mr Chen had rejected.
The DPP criticised the panda deal, saying the fact the two pandas' names mean 'reunion' matches "Beijing's goal of bringing Taiwan into its fold".