BEIJING: China and Japan may sign an agreement to diffuse maritime crisis between the two nations.

The two countries have come close to a military confrontation over a sea dispute on a few occasions in recent years.

Two military leaders, Vice Chief of Staff of China's People's Liberation Army Sun Jianguo and Director General of the Japanese Defense Ministry's Defense Policy Bureau Hideshi Tokuchi, have expressed hope that the two countries will soon sign a Memorandum of Understanding on the maritime and aerial crisis liaison mechanism.

The two were brought together in the same platform by the Shangri-La Dialogue. The Shangri-La Dialogue is organized by the Britain-based International Institute for Strategic Studies which brings together defense ministers, senior officials and security experts to exchange views on key issues that shape the defense and security landscape of the region.

They also expect to launch the mechanism and implement the agreement at an early date, the officials said after a meeting on the sidelines of the ongoing Shangri-La Dialogue involving defense ministers of 26 nations in Singapore.

Sources said that the move is significant because Japan has decided to get out its pacifists constitution and develop military capability of its own instead of depending entirely on the United States. China also wants Tokyo to get out of the US influence and deal directly with it, observers said.

The two countries are quarrelling over ownership of the Diayou Islands (called Senkaku in Japanese) in the East China Sea which is currently in Japan's control. China also has a serious grouse against Japan for allowing its soldiers to torture thousands of Chinese men and women during World War II.

Sun told Japanese officials that China is willing to work with Japan to promote the good- neighborly relations and cooperation, according to the official Xinhua news agency. It wants to protect the hard-won progress in the improvement of bilateral ties, Sun said, indicating that China would do nothing to aggravate the differences.

China is keen to push Washington out of the picture although the US maintains significant naval presence in the region to reassure its allies like Japan of its protection, sources said.

Sun expressed hope that the two sides would continue defense exchanges and cooperation, strengthen mutual understanding along with enhanced management and control over contradictions and crisis.

Tokuchi said Japan is willing to make efforts to improve the bilateral ties there were sharp difficulties and differences in the Sino-Japan relations.

Cooperation in the defense and security field would go a long way to improve bilateral ties, he said. There are indications the two countries might take a step forward and consider holding a joint military exercise at a limited scale as a confidence building measure, sources said.