The reserve troops engaged in mock street battles in the southern town of Chaochou under a scenario that Chinese communist forces had forced their way inland after landing on Chialutang beach.

"This is the first time reserve troops exercised their capability to defend the towns," a Reserve Command spokesman told AFP.

The reserves also displayed their capability in maintaining order, providing shelters to the homeless, and repairing communications and electricity equipment.

Tensions between Taiwan and China have risen since Taiwan's pro-independence president Chen Shui-bian was re-elected in March.

Since then China has staged war games and Taiwan's armed forces have conducted a series of manoeuvres aimed at deterring an invasion. China has reiterated its vow to take Taiwan by force if the island declares independence.

Taiwan's cabinet has approved plans to spend 610 billion Taiwan dollars (18.2 billion US) on weaponry -- including submarines, anti-missile systems and submarine-hunting aircraft -- over a 15-year period from 2005.

The deal will go to parliament for approval towards the end of the year.

The defense ministry said the number of Chinese ballistic missiles targeting Taiwan would increase to 800 by the end of 2006.