Secretary of State Mike Pompeo, Defense Secretary Jim Mattis, Chinese politburo member Yang Jiechi and Defense Minister Wei Fenghe will take part in the talks, a statement from US State Department said on Monday.
"The Chinese side made it clear to the United States that it should stop sending its vessels and military aircraft close to Chinese islands and reefs and stop actions that undermine Chinese authority and security interests", said Pompeo's Chinese counterpart, Yang Jiechi, who also had sharp words over USA support for Taiwan.
China and the United States should correctly judge each other's strategic intentions, and while China wanted to resolve problems via talks, the United States should respect China's choice of development path and legitimate interests, Xi added.
Senior Communist Party official Yang Jiechi, a veteran architect of Beijing's foreign policy, insisted that China allows freedom of religion and criticized the United States for what he saw as its own "militarization" of the South China Sea.
Mattis responded that the United States would "fly, sail and operate wherever global law allows".
Despite the frank airing of differences at the meeting in Washington of the two nations' top diplomats and military chiefs, both sides stressed the need to tamp down tensions, which have flared amid a bitter trade dispute that Trump and Xi are expected to tackle at the Group of 20 summit in Argentina.
"We believe that meeting will help chart the course for China-US relations", he said, following talks with Australian Foreign Minister Marise Payne.
Defense Minister Wei reiterated during the press conference that China would take any necessary measures to ensure the eventual unification of Taiwan is not threatened, a statement in response to the sailing of a USA warship through the Taiwan Strait for the second time in several months.
"China sticks to the road of peaceful development, and is still committed to the building of a relationship with the United States that features no conflicts, no confrontation, mutual respect and win-win cooperation", Xi said. The U.S. also seeks action from China on the export of a synthetic form of opioids called fentanyl that is a scourge of drug addiction in America. China and the US should better understand each other and enhance communication to expand mutual benefits while managing disagreements.
Defense Secretary Jim Mattis said the talks were "candid" but that the two militaries looked to improve communication and avoid "miscalculation" at sea.
Pompeo said the USA had also expressed concern about China's approach to Taiwan, particularly its efforts to limit global engagement with the breakaway province.
Trump has slapped $250 billion worth of tariffs on Chinese goods, accusing Beijing of nefarious trading practices.
Washington has also been increasingly critical of Chinese treatment of religious minorities, including Uygur Muslims in the western Chinese region of Xinjiang.
Despite twists and turns, Sino-U.S. relations have generally maintained steady progress over the past four decades, Xi said.
"Foreign countries have no right to interfere", he said.
The Pentagon had previously declined to comment on a May report quoting unnamed sources with direct knowledge of US intelligence reports as saying that the anti-ship cruise missiles and surface-to-air missile systems had been deployed to Fiery Cross Reef, Subi Reef and Mischief Reef in April or early May.