By Terril Yue Jones

CHENGDU (Reuters) - Chinese and American soldiers finished a week-long disaster rescue exercise on Friday, furthering military ties between the two countries even as military tensions rise between China and U.S. military allies in the Pacific region.

The exercise, which included 20 U.S. soldiers visiting facilities in three Chinese cities, are meant to bring the two rivals closer together through non-combat military collaboration, and to allay fears of countries in the region worried over China's rising influence.

"Our senior leaders have been pretty clear: they're seeking a positive, cooperative and comprehensive relationship between our two nations," said Maj. Gen. Stephen Lyons, commander of the U.S. Army's 8th Theater Sustainment Command, based in Hawaii.

"That spirit of cooperation and that level of transparency I think helps signals throughout the region, and it helps us understand each other," Lyons said at a People's Liberation Army barracks on the outskirts of Chengdu in southwest China, where a massive earthquake devastated nearby regions in 2008, killing more than 87,000 people.

The general leading the Chinese side acknowledged the two services' rivalry, but said they share a common duty.

"The Chinese and American militaries do have our differences, but it is my belief that it is the indispensable responsibility of the two militaries to join forces in disaster relief," said Maj. Gen. Tang Fen, director of the PLA's Mass Work Office, General Political Department.

"Our two sides have a lot of experiences to share with each other and much to learn from each other."

Chinese Defence Minister Liang Guanglie this week also promoted military cooperation between Beijing and Washington.

"We should develop the ties between us, between our two militaries, touch on some of our differences, resolve conflicting views," he told Reuters. "We should push forward the development of our two powers, and push forward the development of a new China-U.S. military relationship."

The U.S. and Chinese military have exchanged occasional visits on disaster relief since 1998, but those were mostly information sharing, Lyons said. This was the first exercise involving planning for joint action, and observation of Chinese troops training in drills such as practicing entering and rappelling down the sides of buildings and using dog handlers.

Amid all nice talk however, the two sides remain considerably wary of each other.

"The distrust of the U.S. military within the PLA is very high. The distrust of the PLA within the U.S. military is substantial," says Kenneth Lieberthal, a former National Security Council senior director for Asia in the Clinton administration.

The two sides have often expressed suspicion over each other's intentions, with Washington viewing China's growing economic and military clout as an attempt to dominate Asia, and Beijing seeing U.S. force projection including President Barack Obama's year-old "rebalancing" of a military focus back to Asia as China-containment. Continued...