The leaders, meeting in Seoul, put on a public show of comity in their seventh one-one-one talks since Obama took office, in an encounter expected to smooth the way for Hu's state visit to Washington in January.

US officials said the 80-minute meeting was dominated by divisions over exchange rate policy and the need to improve the atmosphere of the broader US-China relationship ahead of Hu's visit.

Obama said that it was "wonderful" to see Hu again, and argued that as leading economic and nuclear powers, both nations had an obligation to work together to halt proliferation and to ensure strong, balanced growth.

At a brief photo opportunity ahead of the talks on the sidelines of a G20 summit, Hu said China was ready to work with Washington to "increase dialogue, exchanges and cooperation," and said he hoped his US visit would be a success.

However the two sides have been at loggerheads over a broad range of issues for months, especially economic, and Obama's reinvigoration of US engagement in China's backyard in Asia may also strain ties.

Washington has become increasingly impatient with China's so-far limited efforts to allow the value of its currency to rise. US officials say the yuan's value is kept artificially low to boost Chinese exports.

Beijing meanwhile has been leading global criticism of the US Federal Reserve's plan to pump 600 billion dollars into the US economy, arguing Washington is risking the global recovery in its own search for growth.

After the Obama-Hu talks, Chinese officials sought to throw the onus back on the United States by arguing that Beijing had an "unswerving" commitment to reform its currency regime, but needed economic stability to do it.

China suggested that the G20 should monitor policy shifts by the US central bank and was also furious at Obama's decision to praise the Nobel committee for awarding its annual peace prize to dissident Liu Xiaobo.

However, Washington has in the past year praised China for signing on to toughened UN sanctions against Iran and sees Beijing as a key player in the North Korean nuclear crisis.

With those disputes in mind, Obama said Thursday the US-China relationship was stronger and broader than it had been in the past, because their talks now ranged over global issues as well as bilateral ones.

"As two leading nuclear powers obviously we have (a) special obligation to deal with nuclear proliferation," Obama said at the meeting in a Seoul hotel.

"As two of the world's leading economies we have a special obligation to deal with ensuring strong balance and sustained growth."

Obama, who earlier called on North Korea to show a "seriousness of purpose" before six-nation talks on its nuclear programme can resume, told Hu it was important to press on Pyongyang the need to avoid "provocative" acts.

Six-party talks on North Korea's nuclear programme are currently stalled, with the latest impediment to a resumption being the sinking of a South Korean warship that was blamed on the isolated Stalinist state.

Pyongyang abandoned the talks in April 2009 and conducted its second nuclear test a month later.

Obama, along with other leading US politicians in the election season that ended with last week's mid-term polls, has been increasingly vocal in challenging China's rhetoric and actions -- especially on the yuan.

Last month he even said the United States had been a "pushover" on trade with developing nations like China and vowed to drive a tougher bargain for American products.

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