China was angered by Washington's January announcement of a $6.4bn weapons package for Taiwan, the self-governing island Beijing considers its territory.

China, which has since suspended military exchanges with Washington, threatened to retaliate against US aerospace firms involved in the deal.

Relations between the two countries were strained further when Obama met at the White House with the Dalai Lama, the exiled Tibetan spiritual leader whom Beijing accuses of seeking independence for the Himalayan region.

Trade differences

US officials said Obama met the Dalai Lama as a spiritual, not a political, leader.

Yang did not indicate if a recent visit by James Steinberg, the deputy secretary of state, and Jaffrey Bader, a senior White House Asia adviser, had helped put relations back on track.

The two countries also have differences over trade and how to deal with Iran's nuclear programme.

Yang said they held "in-depth and candid discussions", but did not give details.

The dip in relations comes as China continues to advocate dialogue as a resolution to the Iranian nuclear standoff, although Western powers are seeking to introduce a new set of sanctions against Iran.

Google's allegations

UN diplomats said on Wednesday the proposed sanctions would target Iran's powerful Revolutionary Guard and toughen existing measures against its shipping, banking and insurance sectors.

The US, Britain and France support such new sanctions, and Russia - which is normally opposed - appears to be moving closer to that view.

That leaves only China - a permanent Security Council member - which depends on Iran for much of its energy needs opposed to new sanctions.

Other irritants include Google's contention that its email accounts were hacked from China.

This was followed by criticism by Hillary Clinton, the US secretary of state, of the censorship of cyberspace by China and others.