The leaders of China and Japan have met for formal talks after more than two years of severe tension over a territorial dispute.

Chinese President Xi Jinping and Japanese PM Shinzo Abe met on the sidelines of the Asia-Pacific Economic Co-operation (Apec) summit in Beijing.

The talks are the first between the two leaders. Mr Abe said it was the first step to "improving ties".

Relations have been soured by the row over islands in the East China Sea.

The strategically important islands, known as Diaoyu by China and Senkaku by Japan, are controlled by Japan.

Tokyo's decision to purchase three of them from their private Japanese owner in September 2012 led to an escalation in a dispute that has rumbled quietly for years. 

Analysis: Carrie Gracie, BBC China editor

After two years of Chinese animosity towards Japan's new prime minister, President Xi has finally relented.

Today's face-to-face meeting with Shinzo Abe is important progress in relations between the world's second and third largest economies.

But the underlying disagreements over territory and history remain as bitter as ever. And even Mr Xi's body language at today's meeting was calculatedly icy.

During the handshake he did not smile or respond to Mr Abe's attempt at conversation.

For all the fireworks and group photographs, this summit brings together neighbours with different worldviews at a difficult moment in history.

China has also complained about what it sees as Japan's failure to adequately acknowledge its war-time actions and has been angered by visits by Japanese lawmakers - including Mr Abe - to a shrine that commemorates Japan's war dead, including convicted war criminals.

Mr Abe said the meeting - which came three days after the two sides agreed to work to prevent the dispute from escalating - was "the first step for improving ties by returning to mutually beneficial relations based on common strategic interests", according to AFP news agency.

He also said the two countries had agreed to start preparations to establish a maritime crisis mechanism, AFP said.

There have been fears that a clash - accidental or otherwise - between Chinese and Japanese paramilitary vessels patrolling waters around the disputed islands could trigger a conflict.

Mr Xi told Mr Abe that China hoped Japan would follow a path of peaceful development and adopt prudent military and security policies, state news agency Xinhua reported.