By Caroline Gluck BBC News, Taipei

The two ships are the last of four bought from the US

China regards Taiwan as part of its territory and has threatened force if it formally declares independence.

At the ceremony in northern Taiwan, President Chen Shui-bian urged legislators to swiftly pass an arms budget for new armaments from the US.

The arms package has been blocked in parliament for the past two years.

White-uniformed sailors formed a guard of honour at the commissioning ceremony for the two Kidd Class destroyers at a naval base in Suao.

The vessels - the last of four purchased from the US - will form the backbone of Taiwan's naval fleet.

Built 20 years ago but recently refitted, the vessels are capable of repelling surface, air and submarine attacks.

Political storm

The ceremony took place amid a fierce debate over the purchase of future weapons from the US.

Opposition parties in parliament have blocked a multi-billion dollar arms package for more than two years. They have questioned the high cost and fear it will force Taiwan into an arms race with China.

A slimmed-down arms bill was rejected by a procedural committee earlier this week, marking the 62nd time the budget has been blocked.

At the ceremony, President Chen urged the opposition to approve a new arms budget.

He said they had a responsibility to strengthen the island's security in the face of China's continued military modernisation.

He also defended similar comments made by senior US official in Taiwan Stephen Young last week.

Mr Young had urged lawmakers to pass a new arms bill by the end of the year and not play partisan politics.

But his comments had set off a political storm, with many opposition lawmakers accusing him of interfering in Taiwan's domestic affairs.