Prime Minister Rajiv Gandhi of India and Chinese leader Deng Xiaoping agreed Wednesday to restore friendly ties between the world's most populous countries despite a long-standing border dispute.

"Welcome, my young friend," the 84-year-old senior Chinese leader said to Gandhi, 44, as the two leaders met in the Great Hall of the People."Beginning with your visit we can restore our relationship as friends," Deng said. "The two countries' leaders will become friends, the countries will become friends, the people will become friends."

"I agree and would like to thank you for your warm welcome," Gandhi said.

Deng said he knew Gandhi's grandfather, Jawaharlal Nehru, who came to China in 1954, the last Indian prime minister to do so.

"In the considerable period of time in between, there was unpleasantness with each other," Deng said. "But let us forget it. We should be looking forward."

Later at a speech at presitigious Qinghua University, Gandhi summed up the goal of his trip.

"I have every hope that during this visit we will, together with our Chinese friends, build a better political climate for the solution of the border issue," he said.

In the past, India has said it would only improve bilateral ties once progress was made on the border.

"I am heartened that the Chinese leadership is more than prepared to put behind us past rancor and past prejudices," Gandhi said. "I am heartened that we are both prepared not to be mired in the past."

Chinese-Indian relations were good in the 1950s but a boundary dispute led the two countries into war in 1962.

China claims 36,000 square miles of Indian land. India rejects the claim and demands China return the 15,200 square miles it took in the 1962 war.

During Gandhi's visit, China and India are expected to sign agreements on civil aviation, border trade and science and technology. Consular offices in Shanghai and Bombay may also be established.

Little progress is expected on the border.

Gandhi arrived in Beijing on Monday and spent most of the day meeting with Premier Li Peng. His visit marked the first time Indian and Chinese leaders have met since 1960, when then-Premier Chou Enlai went to New Delhi.

Gandhi and Li discussed the border problem and Gandhi called for a renewal of friendship between the two nations.

"It is now time to look beyond the past," Gandhi said at a banquet Monday night. "It is now time to look forward to the future. It is now time to restore the relationship between our two countries."

In the past, India has said it would only improve bilateral ties once progress was made on the border.

Gandhi also discussed Tibet, trade and the Cambodian conflict with his Chinese hosts in talks his official spokesman described as "warm, cordial and very friendly."

On Tuesday, Gandhi met with China's president, Yang Shangkun, and again talked about China's troubled region of Tibet.

India was one of the first non-socialist countries to recognize Communist China soon after Beijing's 1949 revolution.