Indian and Chinese leaders pledged Thursday to resolve a long-running border dispute that led to a bloody 1962 war, as a stand-off between troops on the remote frontier overshadowed a rare summit in New Delhi.

India's Prime Minister Narendra Modi said he had expressed concerns to China's visiting President Xi Jinping about "incidents" on the disputed border in the northern Ladakh region, where reports said hundreds of troops were facing off.

"I expressed concern on the incidents on the border and said peace and tranquility on the border is the foundation for good relations," said Modi at a briefing after formal talks with Xi.

"(Xi) agreed that the boundary question must be resolved soon."

The two countries have long been embroiled in a bitter dispute over their border, with both sides accusing soldiers of crossing over into the other's territory.

Xi, the first Chinese president to visit India in eight years, said Beijing was committed to working with New Delhi to maintain "peace and tranquility" until the border issue could be settled.

The neighbours, now nuclear-armed, fought a brief but bloody war in 1962 over the Indian state of Arunachal Pradesh in the eastern Himalayas, and are still embroiled in a bitter dispute over the territory.

Last year India accused Chinese troops of intruding deep into Indian-held territory, sparking a three-week stand-off that was only resolved when troops from both sides pulled back.

Details of the latest incident remain sketchy. An Indian army official who asked not to be named said there was "an ongoing situation" with Chinese soldiers in Ladakh, while a local lawmaker told AFP around 1,000 Chinese troops had crossed into the Indian side of the disputed area.

K. G. Suresh, a fellow at New Delhi's Vivekanand International Foundation think-tank, said the timing was no coincidence and that it echoed an incursion when Chinese Premier Li Kequiang visited Delhi last year.

"I think the timing of the incursion is deliberate," Suresh told AFP.

Suresh said China wanted to convey the message that "you may have the best of relations with our arch-rivals Japan and Vietnam, but you will have to ultimately deal with us".

- Muscular foreign policy -

Modi has rolled out the red carpet for Xi, hosting a private dinner in a luxury riverside tent in his home city of Ahmedabad on Wednesday.

India's newly-elected leader is eager to secure Chinese funding to fulfil his election pledge to overhaul his country's crumbling infrastructure, which has held back economic growth in the country of 1.2 billion people.

But he has also signaled he will pursue a more muscular foreign policy than his centre-left predecessor Manmohan Singh, who critics say was too soft on China.

During his election campaign, Modi said China would have to shed what he called its "expansionist mindset".

But he has also spoken of his admiration for China's economic success, and despite his hardline nationalist reputation he moved quickly to engage with Beijing after taking office in May.

China, meanwhile, is keen to foster warmer ties with its western neighbour at a time of heightened tensions with Japan and several Southeast Asian nations over disputed sea territory.

But while the two sides have been at pains to stress cooperation ahead of the visit, much remains that divides them.

China has cultivated close ties with India's arch foe Pakistan, and its growing influence over other South Asian nations have sparked worries of a deliberate strategy to encircle India.

Xi arrived in India from the Maldives and Sri Lanka, where he announced large-scale investment and sought to boost defence ties.

The presence in India of the Dalai Lama is another source of tension.

Speaking to reporters in Mumbai on Thursday, Tibet's exiled spiritual leader said Xi was "more open-minded" than his predecessor Hu Jintao.

The Nobel Peace Prize winner supports "meaningful autonomy" for Tibet within China rather than outright independence, but China accuses him of covertly campaigning for Tibet's independence.

Tibetan students protested against China outside the venue where Xi and Modi held talks, shouting slogans before being taken away in police buses.

- China to boost investments -

Xi pledged greater investment from China, already India's biggest trading partner, with annual two-way commerce of more than $65 billion.

He said China, which built the world's largest high-speed rail system from scratch in less than a decade, would look to develop faster train lines in India and develop industrial parks in Gujarat and Maharashtra states.

India has been pushing for more investment to narrow the trade deficit with China, which has soared to more than $40 billion from just $1 billion in 2001-02.

"When our two countries work with each other for common development, we can bring benefits to the 2.5 billion people in China and India," Xi said.