The United States Tuesday welcomed steps by China and Taiwan to ease cross-strait tensions by canceling long-planned military exercises.

Officials here will not say if the United States had made specific appeals to China and Taiwan. But the State Department is making clear it welcomes the decisions by the two rivals to call off major military exercises along the Taiwan Strait.

Taiwanese President Chen Shui-Bian said Tuesday he had canceled an annual live-fire exercise set for September 9 after China reportedly scrapped its own set of military maneuvers that were to have been staged on Dongshan Island near Taiwan.

At a news briefing, State Department Spokesman Richard Boucher said the United States has consistently pressed for confidence measures by the sides leading to a resumption of dialogue.

"We have consistently encouraged both sides to take steps to resolve differences, to engage in dialogue and to take steps to reduce tensions," he said. "And so we welcome and encourage all these steps that are being taken by Taiwan and the Peoples Republic of China to reduce tension."

Tensions between Taiwan and China have been elevated since Mr. Chen's re-election in May, amid concern in Beijing he would use his new mandate to move toward independence for the island.

China considers Taiwan a renegade province and has not ruled out the use of force to achieve re-unification.

The United States recognizes only Beijing since switching recognition from Taiwan to China in 1979, but is obligated under an act of Congress to supply Taiwan with defensive arms.

President Chen announced cancellation of the maneuvers while on his way to Panama to attend inaugural ceremonies for that country's new president, Martin Torrijos.

U.S. Secretary of State Colin Powell will also attend Wednesday's inauguration in Panama City, but spokesman Boucher said Mr. Powell had no plans to meet with Mr. Chen, consistent with U.S. policy.

Both men also attended events marking Panama's 100th anniversary of independence last November and exchanged greetings at a reception, though U.S. officials said they had no substantive discussion.

Mr. Boucher said Secretary Powell discussed Taiwan and other issues, including the North Korean nuclear program in a telephone conversation Sunday with his Chinese counterpart, Foreign Minister Li Zhaoxing.

He said they have had an ongoing conversation about a possible visit to China by Mr. Powell, which officials say could be part of a wider Asia trip this autumn, but that nothing has been set.