Japan proposed to China on Saturday that they jointly develop the gas fields in a disputed area of the East China Sea as two days of working-level talks on the issue drew to a close.

It was the first time Tokyo has formally called for joint development of undersea deposits that are the focus of a territorial squabble between the Asian giants. China promised to respond to the proposal in the next round of talks, to be held in Beijing later this month.

"We discussed the concept of joint development. Under these circumstances, (some form of joint development) is the only realistic solution," Cui Tiankai, head of the Chinese Foreign Ministry's Asian Affairs Department and the leader of China's delegation, told reporters after the meeting.