As hundreds of protesters targeted Li Peng with less-than- diplomatic words outside, Prime Minister Jean Chretien told a dinner honoring the Chinese premier last night that international stability will come through dialogue and co-operation, not isolation

That veiled reference was as close as Chretien came to acknowledging China's dismal human-rights record, including the continuing occupation of Tibet, the 1989 massacre of hundreds of pro-democracy protesters in Tiananmen Square, and the ongoing repression of dissidents.

Chretien, however, didn't hold back when it came to taking shots at Premier Jacques Parizeau, the only provincial premier to spurn Chretien's invitation to the event.

"International stability grows as countries learn about each other, visit each other, trade with each other, co-operate with each other," Chretien told 1,000 businesspeople at the dinner, organized by the Canada-China Business Council.

"We believe nations feel most secure when they see that the countless connections between them work to their mutual advantage. That engagement and dialogue - not isolation and angry words - are the building blocks of peace and security."

Through an interpreter, Li Peng said Canadian business can tap into a huge market in China because it has expertise in areas like nuclear energy, hydro-electricity and environmental protection, areas he described as priorities for China.

Li Peng is a key advocate of a giant hydro-electric project in central China that environmentalists say will cause mass devastation and displace more than one million people. And he has been criticized for continuing Chinese tests of nuclear weapons.

The Chinese premier, whose limousine sped by some demonstrators, skated around the issue of human rights, going so far as describing China as an important player in "maintaining stability and world peace."

"A politically stable China that is committed to reform and opening up and embarking on the road of comprehensive economic rejuvenation will not pose a threat to anyone or any country," he said.

Li Peng ended his address with a toast, speaking his only English word

- "Cheers" - before being given a standing ovation.

In his speech, Chretien strayed several times from the topic of trade with China to Canadians working together. Although he never uttered the word referendum, the looming vote was clearly on his mind. He didn't pass up the chance to speak directly to Quebecers - his speech was carried live on the French-language all-news channel.

Standing in front of the flags of Canada and the 10 provinces, Chretien referred to the trade mission to China he led last November. Dubbed the Team Canada mission, it included every provincial premier but Parizeau.

"Seeing their prime minister and provincial and territorial leaders working together, as a team," made Canadians proud, Chretien said. "Not to fight. Or argue over turf. Or score political points. But to focus on the No. 1 priority of all Canadians: bringing home jobs for Canadians. Co-operating. Pulling together. Working as a team."

Speaking to reporters earlier, Tory leader Jean Charest criticized Parizeau's decision to snub Chretien's invitation to last night's dinner. "It's the people - who are hoping and wanting their government to take care of jobs and trying to get some economic growth - who are going to pay the price," Charest said.

Parizeau is "putting his partisan, selfish interests ahead of the interest of the people of Quebec," he added. Newfoundland Premier Clyde Wells defended Canada's invitation to Li Peng. "We don't endorse the attitude and approach of the government of China with respect to matters like Tiananmen Square," Wells said. "Nobody can endorse that. (But) I don't think standing sanctimoniously aside and saying, `We won't even talk to you unless you operate on a standard that we prescribe,' is the way to deal with it."

Earlier in the day, Li Peng declined an invitation to meet privately with Bloc Quebecois leader Lucien Bouchard. Li Peng blamed his tight schedule and the "shortness of your notice of this meeting." Bouchard asked for the meeting on Tuesday.

In a statement, Bouchard said he was disappointed by the rejection because he had wanted to raise the subject of human rights in China. Police estimated 400 human-rights activists staged a noisy and colorful demonstration outside the banquet at the Sheraton Centre. More than 100 Montreal Urban Community police officers, wearing riot helmets and holding nightsticks, kept the boisterous protesters behind barricades across the street from the hotel. While members of the Chinese delegation watched from a second- floor window, protesters called Li Peng the butcher of Tiananmen Square and assailed Canada for ignoring China's well-documented human-rights abuses.

"Jean Chretien, shame on you," the protesters shouted, as they waved placards showing a caricature of Li Peng accepting an invitation from Chretien as the premier sits on a tank clutching a bloody knife.

"He is the most hated man in China and the architect of the Tiananmen Square massacre," said Kenneth Cheung, chairman of the Montreal Society in Support of Democracy in China. "Why are we inviting him to our country? Canada doesn't invite Saddam Hussein or Yasser Arafat here and this man is much worse than them. He is the mastermind of the cold-blooded massacre of unarmed people. He doesn't deserve Canada's respect."

Lyan Lee, 21, who was in Tiananmen Square in 1989 when Chinese soldiers killed hundreds of pro-democracy activists, said she was disgusted that Chretien would welcome Li Peng to Canada: "Chinese people have strong feelings toward Canadians and they can't understand why he is being accepted here. We are here to send a message to Li Peng that we will never forget what he did in Tiananmen Square. We will never forget that he slaughtered his own people."

Some of the most vocal demonstrators were members of Montreal's small Tibetan community, who were protesting against a crackdown on human rights in their country, which is occupied by China. Several elderly Tibetan women chanted "Tibet for Tibetans," as they waved their country's colorful flag.

Many demonstrators said they support increased trade with China but want Canada to take a firm stance against human-rights abuses.

Amnesty International held a silent march from Complex Guy Favreau to the Sheraton Centre to raise awareness of China's human-rights violations. "Silence is tantamount to complicity," said spokesman Carole Chenner. "If you know it is going on and do nothing about it, you are an accomplice."

During the march, about 100 Amnesty supporters covered their mouths with white cloths to symbolize the lack of freedom of speech in China.

"Li Peng makes sure there is no debate on China's human-rights record," Chenner said."