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Mr Kan said the Senkaku/Diaoyu islands, also claimed by China, belonged to Japan
The Japanese prime minister, Naoto Kan, and his Chinese counterpart, Wen Jiabao, have met for the first time since a dispute erupted last month.
Both sides reiterated their territorial claims in an area where a boat collision sparked the worst row between the two countries in five years.
But at the brief Brussels meeting both also spoke of the need to improve ties.
On a separate front, Chinese and European leaders are to meet today to discuss currency policies.
Related stories
Representatives of 46 countries are holding an Asia Europe Meeting (ASEM) in the Belgian capital.
Last month, Mr Wen refused to meet Mr Kan on the sidelines of a United Nations summit, after Japan arrested the crew of a Chinese fishing boat in disputed waters.
This time, a Japanese spokesman said, there was an "encounter after dinner".
"They agreed to improve relations, to resume exploring ties," said the spokesman, Noriyuki Shikata, deputy cabinet secretary for public relations.
Japan's Kyodo news agency said Mr Kan and Mr Wen agreed that "deterioration in bilateral ties over maritime collisions is not desirable".
They also agreed to "hold high-level bilateral talks on regular basis" but no new meeting was set.
A Chinese foreign ministry statement said the leaders had agreed to strengthen non-governmental exchanges, and hold high-level talks, at an appropriate time.
Ongoing disputesGas fields: The countries argue over gas exploration rights in the East China SeaDisputed islands: Both countries claim ownership of Senkaku/Diaoyu islandsYasukuni Shrine: Memorial to Japan's war dead which China sees as glorifying war criminals
The BBC's Tokyo correspondent Roland Buerk said the two leaders had appeared to avoid each other during the ASEM.
But after the formal talks were over in Brussels, they met in a corridor outside the conference venue in what Mr Kan described as a "spontaneous" encounter.
Mr Kan has been criticised in Japan for seeming to cave in to Chinese pressure after the detained Chinese fishing boat's captain was eventually allowed to go home.
On Saturday conservative activists demonstrated in Tokyo against what they saw as a diplomatic defeat.
The two powers clashed over islands in the East China Sea which China calls the Diaoyu and Japan the Senkaku Islands.
Last week, Mr Kan expressed concern over China's maritime activities and military build-up, calling on China to act as a "responsible member of the international community".
This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.
Mr Kan said the Senkaku/Diaoyu islands, also claimed by China, belonged to Japan The Japanese prime minister, Naoto Kan, and his Chinese counterpart, Wen Jiabao, have met for the first time since a dispute erupted last month.
Both sides reiterated their territorial claims in an area where a boat collision sparked the worst row between the two countries in five years.
But at the brief Brussels meeting both also spoke of the need to improve ties.
On a separate front, Chinese and European leaders are to meet today to discuss currency policies.
Related stories
Representatives of 46 countries are holding an Asia Europe Meeting (ASEM) in the Belgian capital.
Last month, Mr Wen refused to meet Mr Kan on the sidelines of a United Nations summit, after Japan arrested the crew of a Chinese fishing boat in disputed waters.
This time, a Japanese spokesman said, there was an "encounter after dinner".
"They agreed to improve relations, to resume exploring ties," said the spokesman, Noriyuki Shikata, deputy cabinet secretary for public relations.
Japan's Kyodo news agency said Mr Kan and Mr Wen agreed that "deterioration in bilateral ties over maritime collisions is not desirable".
They also agreed to "hold high-level bilateral talks on regular basis" but no new meeting was set.
A Chinese foreign ministry statement said the leaders had agreed to strengthen non-governmental exchanges, and hold high-level talks, at an appropriate time.
Ongoing disputesGas fields: The countries argue over gas exploration rights in the East China SeaDisputed islands: Both countries claim ownership of Senkaku/Diaoyu islandsYasukuni Shrine: Memorial to Japan's war dead which China sees as glorifying war criminals
The BBC's Tokyo correspondent Roland Buerk said the two leaders had appeared to avoid each other during the ASEM.
But after the formal talks were over in Brussels, they met in a corridor outside the conference venue in what Mr Kan described as a "spontaneous" encounter.
Mr Kan has been criticised in Japan for seeming to cave in to Chinese pressure after the detained Chinese fishing boat's captain was eventually allowed to go home.
On Saturday conservative activists demonstrated in Tokyo against what they saw as a diplomatic defeat.
The two powers clashed over islands in the East China Sea which China calls the Diaoyu and Japan the Senkaku Islands.
Last week, Mr Kan expressed concern over China's maritime activities and military build-up, calling on China to act as a "responsible member of the international community".
This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.