Chen is regarded with the deepest suspicion in Beijing

The White House said Thursday's speech, in which Mr Chen pledged to keep independence off the agenda, had been "responsible and constructive".

However Chinese state-run media called the president a "slippery politician", and dismissed his conciliatory tone.

Beijing has threatened to attack Taiwan if the island declares independence.

In his speech following his swearing-in for a second term in office, President Chen said a top priority would be improving ties with Beijing.

Shui-bian's address creates an opportunity for Taipei and Beijing to restore dialogue across the Strait White House statement Press divided on Chen speech Speech reaches out to foes

He also defended controversial plans for constitutional changes to improve Taiwan's government system. China regards these changes as moves towards independence, even though the president made clear his reforms would not touch on controversial areas like sovereignty, and did not link their approval to a referendum.

In its response the US administration - a key ally of Taiwan - welcomed the president's "commitment not to take steps that would unilaterally change the status quo".

"Chen Shui-bian's address creates an opportunity for Taipei and Beijing to restore dialogue across the Strait," the White House said in a statement.

Chen Shui-bian's latest offer of 'goodwill' turns out to be another sham. China Daily

China's government has not yet made any official comment on the speech.

The country's official media, however, had very different reading of the speech.

"Chen Shui-bian's speech cannot cover up true intent of Taiwan independence," a headline in Beijing News read.

According to an editorial in the China Daily: "Chen Shui-bian's latest offer of 'goodwill' turns out to be another sham."

The inauguration went ahead despite a legal challenge against Mr Chen's re-election in a March poll.

The president won the election by less than 0.2% of the vote, fuelling opposition complaints that the election-eve shooting of Mr Chen unfairly influenced the result.

In his speech, Mr Chen said he would try to "reconcile the deep divide" caused by the election and "unify the people of Taiwan".