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Beijing however demands an apology from Washington over the blind activist's case.
The United States and China forged a deal Wednesday on the status of activist Chen Guangcheng, allowing him to leave the U.S. embassy in Beijing where he had sought shelter last week after dramatically escaping house arrest, U.S. officials said.
Chen, who said he suffered severe beatings under house arrest, is undergoing treatment at a medical facility in Beijing and will be reunited with his family, U.S. officials said in the first public acknowledgment that he had taken refuge at the American embassy.
Under an arrangement agreed to by the United States, China, and Chen, the 40-year-old activist will be relocated to a different part of China from his hometown in Shandong province, where he has been under house arrest and where he says he and his family have been physically attacked, various reports said.
Chen, who fell foul of local authorities by exposing forced abortions and sterilizations under China's "one-child" policy, will be allowed to further pursue his study of law at a university under the understandings.
U.S. Secretary of State Hillary Clinton, who is in Beijing for annual talks, confirmed that the "understandings" on the treatment of the 40-year-old activist had been reached, defended the U.S. handling of his case, and said it had been handled "in a way that reflected his choices and our values."
It is now crucial to ensure that Beijing keeps its pledges to end the persecution of Chen and his family, she said.
"Mr. Chen has a number of understandings with the Chinese government about his future, including the opportunity to pursue higher education in a safe environment. Making these commitments a reality is the next crucial task," Clinton said in a statement.
"The United States government and the American people are committed to remaining engaged with Mr. Chen and his family in the days, weeks, and years ahead," she said.
Chen's escape has sparked growing diplomatic tension ahead of annual bilateral talks between Beijing and Washington on Thursday.
Despite the understanding as claimed by U.S. officials, Beijing demanded an apology from the United States for what it called "interference" in its affairs.
While China's Foreign Ministry said Chen had left the U.S. embassy of his own will, activists close to Chen said he left the diplomatic mission against his will.
"China acknowledged that Mr. Chen will be treated humanely while he remains in China," a U.S. official was quoted by Agence France-Presse as saying.
Beijing has committed to allow Chen to go to a "safe" place in China, the official said, adding that the activist made no request to leave China.
But the official declined to comment on China's call for an apology over the incident surrounding Chen, who fled from his house in Shandong province on April 22 and sought refuge in the U.S. embassy where he demanded assurances on his freedom.
China demands an apology from the U.S. side for taking a Chinese citizen "via abnormal means" into its embassy in Beijing, a Chinese Foreign Ministry spokesman was quoted saying by the official Xinhua news agency.
"Chen Guangcheng, a native from Yinan County of eastern China's Shandong Province, entered the U.S. Embassy in Beijing in late April and left of his own volition after staying there for six days," Xinhua reported.
"China is very unhappy over this. The U.S. action is an interference in China's internal affairs and China cannot accept it," Xinhua quoted Chinese foreign ministry spokesman Liu Weimin as saying.
"China demands that the U.S. apologize and thoroughly investigate this incident, deal with the people who are responsible, and ensure these types of incidents do not occur again," he said.
A Chinese activist close to Chen claimed he was forced to leave the U.S. embassy against his will because officials had threatened to return his family to face life under constant threat of video surveillance and the threat of further violence, contradicting official media reports that the activist had left of his own free will.
The allegations came from the Twitter account of Beijing-based rights activist Zeng Jinyan, who is a close friend of Chen and his wife, Yuan Weijing, who is now in the capital with the couple's two children.
"If [Chen] Guangcheng hadn't agreed to leave the embassy, they would have taken her and their children straight back home again," according to one message, which said Shandong officials had "moved in" to the Chen family home and were busy installing spy cameras there.
Another tweet said: "He [Chen] said he was willing for his whole family to leave China."
The initial message from Zeng's account, written in English and sent shortly after 8.00 p.m. Beijing time, read: "GUANGCHENG TALKED TO ME. WHAT MEDIA REPORTED IS WRONG."
Rights groups also said they remain concerned over the fate of activists who helped Chen escape from his home in Dongshigu village, as well as his elder brother Chen Guangfu and nephew Chen Kegui.
"While Cheng Guangfu was seized, Chen Kegui [was] believed to be taken into custody after being injured in an altercation with officials and thugs during which he grabbed knives to defend himself," the Hong Kong-based group China Human Rights Defenders (CHRD) said in an e-mailed statement.
Two other relatives, Chen Guangcun and Chen Guangcun’s son, Chen Hua, are also known to have been taken into custody, on April 28, CHRD said.
Rights lawyer Teng Biao told Agence France-Presse that he had spoken briefly with Chen's wife, Yuan Weijing, and said that both she and their two children were now in Beijing.
The Strategic and Economic Dialogue which begins on Thursday will focus on bilateral trade, as well as diplomatic cooperation on Iran, Syria, North Korea, and other international disputes.
Reported by Luisetta Mudie and Parameswaran Ponnudurai.