China and the Arab League nations yesterday agreed to work together on energy and counter-terrorism measures as part of their drive to build a new partnership.

Both sides place heavy emphasis on energy co-operation  particularly  over oil, natural gas and renewable power  according to an action plan issued in the wake of the second ministerial meeting of the China-Arab Co-operation Forum, which concluded in Beijing yesterday.

"China and the Arab countries will encourage their enterprises to increase mutual investment and set up joint ventures in the energy sector," said the document which was signed by Foreign Minister Li Zhaoxing and Arab League Secretary-general Amre Moussa.

The first oil meeting between China and the Arab countries will be held some time between 2006 and 2008, according to the plan.

The Arab countries are China's largest crude oil supplier. Last year 55.36 million tons of crude were imported from Arab countries, 43.7 per cent of the nation's total oil imports.

In a communiqu signed yesterday, the two sides also agreed to step up anti-terror co-operation in bilateral, regional and multi-lateral fields.

During the two-day conference, foreign ministers and representatives of the 22 Arab states discussed political and economic collaboration with China.

The meeting made it clear that "building a new partnership" is the direction of future China-Arab relations, Li said at a joint news conference with Moussa and Mohammad Hussain Al Sha'ali, current president of the Council of the Arab League.

"Looking back, we can summarize the 50 years of Sino-Arab relations as mutual
trust, mutual benefit and mutual assistance," Li said.

Echoing Li, Sha'ali said co-operation with China is conducive to development in Arab countries and the stability and prosperity of the whole region.

A plan on environmental co-operation and a memorandum of understanding for a meeting between Chinese and Arab entrepreneurs were also signed.

Responding to a question about the conflict between Palestinians and Israelis, Moussa urged Hamas to recognize the Arab peace initiative and said the conflict should be resolved through political negotiations.

On Wednesday, Palestinian Foreign Minister Mahmud al-Zahar told the forum that the Palestinian Government would study the Arab peace initiative with a "serious and positive attitude," in an attempt to find a just solution to the conflict.

"Zahar's remarks are a positive sign and China welcomes them," Foreign Ministry spokesman Liu Jianchao said at a regular news conference in Beijing yesterday.

"China insists on the settling of the Middle East issue through negotiation on the basis of the relevant United Nations resolutions and the principle of land for peace," Liu said.

"We hope the international community will make concerted efforts to encourage the new Palestinian government to adopt a more active attitude, to renounce violence, accept the previously reached agreements and start peace talks with Israel."

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