Prime Minister Manmohan Singh [Images] on Monday held talks with visiting Chinese Premier Wen Jiabao on a host of bilateral matters, including the vexed boundary issue.

The talks were held in the backdrop of the two countries deciding to ink an agreement on political parameters and guiding principles to settle the issue.

Talking to reporters before the talks, Wen said a 'bridge of friendship' was being laid between India and China. He said the two nations have agreed on a five-year plan for comprehensive cooperation in economy and trade to promote bilateral ties.

"This is a very important visit in the history of our relations and I am sure this visit will certainly continue to promote friendly ties and cooperation between our two countries," Wen, who is in India on a four-day visit, told reporters after being accorded a ceremonial reception at the Rashtrapati Bhavan [Images].

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With Prime Minister Manmohan Singh standing beside him, the Chinese premier expressed confidence that 'we will be able to bring even closer our partnership'.

"We are going to put in place a bridge of friendship linking our two countries, a bridge that will lead both of us to the future," said Jiabao, who arrived in India on Saturday and reached New Delhi on Sunday after a daylong visit to Bangalore.

He said the two countries have also decided to ink an agreement on guiding principles to settle the boundary issue.

India and China have agreed on a three-tier process, comprising an accord on the guiding principles at the first stage, agreed framework in the second and actual delineation of the border in the third.

The decision on signing an agreement on political parameters and guiding principles to resolve the issue was reached in talks between Special Representatives of the two countries, M K Narayanan and Dai Bingguo in New Delhi on Sunday.

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The spadework for the 'political guiding principles', done during last month's meeting between Foreign Secretary Shyam Saran and his Chinese counterpart Wu Dawei in Beijing [Images], would enable the two countries to resolve the dispute in a mutually acceptable manner, official sources said.

After his meeting with Dai, who is also China's Executive Vice-Foreign Minister, National Security Advisor Narayanan said the document on guiding principles 'showed a lot of give and take on both sides'.

He expressed the hope that the document would be 'a major starting point' in the settlement of the dispute.

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