Welcoming Abbas with state honours, President Xi Jinping stressed that China firmly supports the just cause of the Palestinian people.
Abbas is the the first head of state from the Middle East region to visit China after Xi assumed the Chinese presidency in March.
Netanyahu arrived in Shanghai today and will be visiting Beijing for talks with the Chinese leadership, state-run CCTV reported.
In his meeting with Abbas, Xi said the Palestine issue is the core of the Middle East issue.
So long as the legitimate national rights and interests of the Palestinian people can not be restored, peace between Palestine and Israel would not be realised, "let alone peace and stability in the region," he said.
He also stressed that the Palestinian issue "should not be neglected at anytime and must be put in an important and noteworthy position" and proposed a four-point proposal to resolve it.
At the same time, Israel's right to exist and its legitimate security concerns should also be fully respected, the proposals said adding negotiation is the only way to peace between Palestine and Israel.
"The immediate priority is to take credible steps to stop settlement activities, end violence against innocent civilians, lift the blockade of the Gaza Strip and properly handle the issue of Palestinian prisoners in order to create the necessary conditions for the resumption of peace talks," the proposals said.
"Relevant parties of the international community should have a greater sense of responsibility and urgency, take an objective and fair position, make vigorous efforts to encourage talks for peace, and increase assistance to Palestine in such fields as human resources training and economic development," it said.
Chinese Foreign Ministry has denied reports of any plans for mediation as both Abbas and Netanyahu are in the country around the same time.
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