Troops of India and China on Friday kick-started their first-ever joint military exercise with a focus on anti-terrorism drill in southwest China, taking the ties between the world's two largest armies to a new high.

The hoisting of national flags of both the countries to the national anthems played by the People's Liberation Army band and marchpast marked the opening ceremony of the five-day drill at the Kunming Military Academy in Yunnan province in an air of expectancy from both sides.

The exercise, titled 'Hand-in-Hand 2007' reflecting warmer military ties, got off to the start with Chinese soldiers demonstrating skills in Hard Qigong martial arts, including self-defence actions.

This was followed by manoeuvres showing the capabilities of PLA soldiers to strike at the enemy overcoming obstacles including exploding bombs and grenades hitting at the target, shooting at short intervals.

Seated on stage, the Indian troops drawn from the Jammu and Kashmir [Images] Light Infantry watched with keen interest every action of the Chinese soldiers and clapped in appreciation after the end of each manoeuvre.

At the opening ceremony, Brig D S Dadwal, head of the directing staff, said the joint Sino-Indian military exercise was 'another step' to deepen the understanding and cooperation between the two armies.

He said development of military-to-military relations was an integral part of the overall improvement of bilateral relations as he noted a 'lot of positive development' including the signing of a Memorandum of Understanding on defence operation which had led to the exercise as its 'logical outcome'.

Major Gen Xiong Zuoming, head of a Chinese military expert group, said the international community had recognised that terrorism would have a 'negative impact' and the joint training showed that both India and China were committed to fighting it and ensure peace and stability and a 'harmonious world'.

"The training is a testimony to the world of determination and abilities both our armed forces share in fighting terrorism and their commitment to peace and stability," he said.

After demonstration of their combat skills, the PLA held a display of Chinese-made weapons.

The weapons included the QB295 5.8 mm automatic rifle used by a single soldier to kill hostile live targets and destroy light armour, the QS292 9 mm pistol designed for commanders and special forces to destroy live targets in short distance, and the QJB95 5.8 mm machine gun used by infantry squads.

Also on display were the QBU 5.8 mm sniper rifle, a semi-automatic weapon designed for sniping, the QS B91 7.62 mm dagger pistol weapon used in person to person combat, the QL287 35 mm automatic grenade launcher, the PF98 rocket launcher and the PP89 60 mm mortar and a vehicle for troop mobility and logistical support.

"The Chinese soldiers were quite professional and their skills were of a good order. Their firing standards were also good. Their tactical and individual skills were impressive. During the exercise, we will be able to learn from each other," Col J S Budhwar, the battalion commander, said after the Chinese manoeuvres.

Col Y K Joshi, the defence attach� in the Indian embassy in Beijing [Images], said the joint exercise was a 'big step forward' in defence relations between the two countries.

"We will learn from each other so that we are able to operate together, should there be a requirement for inter-operability," he said.

The first joint exercise by the two armies comes as a sign of warming of ties between the two Asian giants, 45 years after they fought a brief war in 1962.

The exercise was scheduled to happen much earlier, but the dates were finalised during the first Annual Defence Dialogue between the two nations in Beijing in November.

India and China had held the first joint naval exercise in November 2003 off Shanghai on China's eastern seaboard which has continued since then, with two ships of the Indian Navy making port calls at Qingdao and taking part in a joint exercise with the PLA Navy earlier in 2007.

The two armies have been holding bonhomie meetings on the border and inviting observers to each other's exercises, but the joint drill is being held for the first time, upgrading the military ties. Indian contingent consists of 103 troops and the Chinese side an almost equal number.