The Chinese government warned Taiwanese President Chen Shui-bian on Monday to pull back from a "dangerous lurch toward independence" or face "destruction." But it also offered economic, diplomatic and other benefits if Chen acknowledges that Taiwan and the mainland are part of "one China."

The carefully worded statement, released by the official New China News Agency just after midnight, came three days before Chen was scheduled to be sworn in for a second term and appeared to be intended as a warning that he should abandon the pro-independence rhetoric of his campaign when he delivers his inaugural address.

With tensions running high across the Taiwan Strait, the Bush administration has already put pressure on Chen to avoid provoking China's Communist leadership and to map out a realistic plan for improving relations with Beijing in the speech. Senior Taiwanese officials say Chen is prepared to make goodwill gestures, but it is unclear how far he will go.

Chen, who narrowly won reelection in March, says Taiwan is an independent nation. China claims sovereignty over the self-governing island and has threatened to seize it by force if it formally declares independence.

The United States has pledged to help defend Taiwan if necessary, but with troops already deployed in Iraq and Afghanistan, U.S. officials are worried about being dragged into a military conflict with China. In recent statements in Washington and Taipei, U.S. officials have warned Taiwan that any unilateral move toward formal independence would recklessly risk a war that could destroy the freedom, prosperity and autonomy it currently enjoys.

Describing relations with Taiwan as "severely tested," the Chinese government warned that if Chen continued to insist there was "one country on each side" of the Taiwan Strait -- one of his most popular campaign slogans -- "hopes for peace, stability, mutual benefit and a win-win scenario in cross-strait relations will evaporate."

"The Taiwan leaders have before them two roads," the statement said. "One is to pull back immediately from their dangerous lurch toward independence, recognizing that both sides of the Taiwan Strait belong to one and the same China. . . . The other is to keep following their separatist agenda to cut Taiwan from the rest of China and, in the end, meet their own destruction by playing with fire."

"If Taiwan leaders should move recklessly to provoke major incidents of Taiwan independence, the Chinese people will crush their schemes firmly and thoroughly at any cost," it added.

But the statement also laid out in unusual detail what the Chinese government is willing to offer Taiwan if it agrees it is part of "one China," including a resumption of cross-strait talks and a range of economic benefits, such as direct trade, shipping and air links and increased access to mainland markets.

China also offered to establish "a mechanism of trust in the military field," suggesting it may be willing to ease its buildup of missiles and other forces aimed at Taiwan. And it dangled the prospect of negotiations to resolve "the issue of the international living space of the Taiwan region," implying that it might be willing to allow Taiwan to send its own diplomats abroad and soften policies preventing the island from joining international organizations such as the World Health Organization.

Chen has repeatedly rejected the Chinese government's "one China" principle, arguing that it makes Taiwan a local jurisdiction under Beijing and is unacceptable to the island's 23 million citizens. But he has said he is willing to discuss a "future one China" with Beijing and set aside his policy that there is "one country on each side" of the Taiwan Strait if Beijing sets aside its "one China" principle.

A senior Taiwanese official, who spoke on the condition he not be identified, said last week that Chen would probably address the "one China" dispute in his inaugural speech and adopt language that "moves closer to Chinese demands."

"There's going to be significant goodwill gestures sent to China," the official said. But he warned that if the Chinese government did not respond positively, there would be domestic political pressure on Chen to take a hard line again.

The official also signaled a new flexibility regarding Chen's controversial plan to rewrite Taiwan's constitution. Chen has proposed drafting a new constitution for the island and holding a referendum to approve it in 2006. China has argued that could amount to a formal declaration of independence and prompt a war.

The official said Chen was considering whether to amend the island's current constitution instead, an option that U.S. officials have argued would be less provocative.

The official said Chen still intended to rewrite 80 to 90 percent of the constitution to streamline the government and make it more democratic. But he said the reforms would not touch on sensitive issues of sovereignty, including Taiwan's name, flag and the definition of its territory.

He said the Bush administration has expressed concern about the constitutional reforms and "has been heard loud and clear. We understand the concern and nervousness of the U.S. We're going to be very careful."