Hong Kong's government held its first talks Tuesday with pro-democracy protest leaders but made no breakthrough in their bid to end three weeks of disruptive mass rallies which have posed a major challenge to Beijing.

Student leaders faced off with government negotiators during the tense two-hour meeting in which both sides agreed on little as the discussions were broadcast live to thousands of rapt democracy demonstrators camped out on the street.

The crunch talks came as the embattled leader of the semi-autonomous Chinese city extended a potential olive branch to protesters hours before the talks began, saying he was open to creating a more democratic committee to help choose his successor.

Government negotiators responded positively to the meeting saying they hoped for further talks down the line.

But the students were noticeably more muted, calling the government "vague" in its commitment to finding a compromise and saying they would need to consult before agreeing to further negotiations.

"The government played tai chi for two hours," student leader Lester Shum told crowds of cheering supporters late Tuesday.

Several major intersections in the business hub have been paralysed since September 28 by mass rallies demanding free elections, in one of the biggest challenges to Beijing's authority since the Tiananmen pro-democracy protests of 1989.

Protesters are demanding China rescind its insistence that candidates for the city's next leader be vetted by a pro-Beijing committee before standing for election in 2017 -- a proposal dubbed "fake democracy" by demonstrators.

Protesters want the public to be able to nominate candidates but the city's government has said China will never allow that.

Observers hope the talks, which were abruptly cancelled earlier this month and then resurrected after recent outbreaks of violence between protesters and police, will help find some sort of compromise.

Five student leaders, dressed in T-shirts bearing the slogan "Freedom Now", faced off against five suited senior government officials in talks at a medical college campus.

During the discussions, government officials said there was still room to make the panel charged with vetting candidates for the city's next leader more democratic.

They also said they would brief Beijing on recent events and suggested both sides could set up a committee to discuss further political reform beyond 2017.

- Hopes for further talks -

"Today's dialogue will hopefully be the first of several rounds of dialogue," Chief Secretary Carrie Lam, who led the government team, told reporters whilst emphasising there could be no changing Beijing's mind on the rejection of civil nomination.

However student leader Alex Chow was less positive.

"Our feeling towards the meeting today would be quite complicated," he told reporters after the talks, lamenting the lack of "concrete proposals" from the government.

He and fellow student leaders later called on crowds to remain on the streets to keep pressure on the government.

Hours before the meeting began the city's embattled Chief Executive Leung Chun-ying -- who was not invited by students to attend the talks -- offered a possible compromise in the form of a more democratically chosen nominating panel for candidates at the next election.

"There is room for discussion there, there's room to make the nominating committee more democratic and this is one of the things we'd very much like to talk to not just the students but the community at large about," he said.

Leung was picked by a pro-Beijing committee in 2012. His offer is still a long way from meeting the core demands of protesters, but could offer both sides a way out of the impasse.

At the three protest sites occupied by demonstrators, thousands watched proceedings livestreamed onto large screens or huddled around mobile phones and laptops.

Student leaders were loudly cheered and applauded by the crowds, while government negotiators were often jeered.

Some of those camped on the streets saw the talks as a significant moment after weeks of stalemate.

"This is the first time we were actually able to sit down with the government, so in that sense this is something of a victory. There's no way they can ignore us now," 19-year-old Danny Ng told AFP at the main protest site opposite the government's headquarters.

But Joy Lam, a 36-year-old social worker, was less optimistic.

"It's not good, the government is still telling us what to do. I don't think we will get any agreement because this government is still ignoring the people's hopes and wishes," she said.

Though largely peaceful, the rallies have seen increasing confrontations in the past week as police tried to clear some of the protest sites. There are fears any breakdown in the talks could spark fresh violence.