With military precision, Chinese and Russian units began the second phase of the week-long "Peace Mission 2005" exercise on east China's Shandong peninsula at exactly 7:56 am (2356 GMT Friday), the Xinhua news agency said.

"The second phase focuses on the transportation and deployment of troops, decision-making and adjustment and organization of coordinated actions," said Major General Zhang Qinsheng, according to Xinhua.

Senior Chinese and Russian officers assembled at the headquarters of China's North Sea Fleet in the port city of Qingdao to observe the drill on a large screen, Xinhua reported.

The exercise was taking place against the backdrop of "the fight against terrorism, separatism and extremism," according to the agency.

These threats are usually cited by the Chinese government within the context of its endeavors to control the northwestern region of Xinjiang, home to a Muslim separatist movement.

The first phase of the exercises, involving warships, submarines, bombers, helicopters and fighter planes, began Thursday near the city of Vladivostok on Russia's Pacific coast.

In the course of the second phase, expected to last until Monday, the two sides will simulate a situation where they have to make decisions on military action in the face of common threats, Xinhua said.

During the third phase of the exercise, due to last from Tuesday until Thursday, the Chinese and Russian troops will jointly practise offshore blockades and amphibious landings.

A total of 10,000 officers and men from the two nations are taking part in the maneuver including more than 7,000 from the Chinese People's Liberation Army, according to the agency.

The Russian troops, including officers and soldiers from the paratroops, the marine corps, the air force and the navy, started arriving on Shandong peninsula and offshore waters on August 9, Xinhua said.

Russian equipment that will be tested in the drill includes the Il-76 transport plane, Il-78 refueling plane, A-50 early warning plane, Tu-95 MS and Tu-22M3 strategic bombers, Su-24M2 bomber, and Su-27SM fighter jet, it said.

The exercise is funded with Chinese money, reflecting a wish in Beijing to send a warning to Taiwan, according to a report this week in the Russian newspaper Kommersant.

China considers Taiwan part of its territory and threatens to ionvade if it formally declares independence.

Washington, which has indicated unease over the pace of China's military build-up, is not attending as an observer but said it was closely monitoring the drills, warning that they should not undermine regional stability.

China and the former Soviet Union were close Cold War allies in the 1950s and Moscow provided Beijing with crucial initial assistance for its nuclear weapons program.

However the two allies eventually split, partly over ideological differences, and tensions throughout the 1960s culminated in armed clashes between them in 1969.

Since the end of the Cold War and the break-up of the Soviet Union, relations have again warmed and Russia is now China's leading arms supplier.

China has stepped up its military exchanges, especially with neighboring countries, in recent years.

The People's Daily reported that its armed forces have conducted joint drills with foreign armies 12 times since October 2002.

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