Should war break out, the so-called "blackout bombs" would be carried by Hsiungfeng 2E cruise missiles to paralyze the power systems of China's southeastern coastal cities, the United Daily News said.

The bombs work by sprinkling a cloud of chemically treated carbon fibers over power supplies, causing them to short-circuit, but without killing people.

If approved by parliament, the Chungshan Institute of Science and Technology - Taiwan's top arms research unit - would begin research and development of the weaponry at a cost of up to NT$500 million (US$15.34 million), beginning next year, according to the report.

Taiwan's defense ministry declined to comment on the claims.

Reports said the United States used the graphite bomb against Iraq in the Gulf War, wiping out 85 percent of its electrical supply.

Rocky relations between Taiwan and China look set to continue after the island's independence-leaning President Chen Shui-bian (陳水扁) dismissed an offer of a peace treaty with China, saying it would be like agreeing to "a treaty of surrender."

Speaking to the International Herald Tribune last week, Chen said China's call for the signing of a peace agreement with Taipei under the term of "one China principle" last week was made in terms that made it unacceptable.

Hu made what he called the "solemn appeal" in a keynote speech at the opening of the Chinese Communist Party's five-yearly Congress in Beijing on Monday last week, but insisted independence for the island would never be tolerated.

Taiwan and China split in 1949 after a civil war, and while the island has since governed itself, Beijing considers it part of its own territory awaiting reunification.

China has repeatedly threatened to invade the island should it declare formal independence, prompting Taiwan to acquire advanced weaponry, largely from the United States.

Taiwan earlier this month flexed its military muscle, showing off two home-developed missiles in a rare parade seen as a reminder to China that it has the means to defend itself.