Xi, who is tipped to take over from Hu Jintao as China's next president and general secretary later this year, had not been seen in public since the beginning of this month, triggering much speculation in the country about his health and rumors about his political standing.
Xi's meeting with Panetta in Beijing was the first such meeting with a top foreign official since his absence, the BBC reported.
In Xi's first reappearance since Sept. 1, the official Xinhua news agency last Friday carried several photographs of him chatting with children at a science popularization day at the University of Beijing.
During his meeting with Panetta, Xi talked of his visit to the United States in February, Xinhua reported. Xi was quoted as saying the U.S. official's visit would help further advance relations between the two countries and their militaries.
Panetta appreciated Xi's all-round support to encourage the military-to-military relationship, the report said.
Although Xi is expected to take over the country's leadership later this year during the once-in-a-decade leadership change, no date has been set for the event.
Prior to his absence from the public, Xi had canceled meetings with visiting foreign leaders including U.S. Secretary of State Hillary Clinton, which raised several questions and rumors as there had been no official explanation.
In an earlier opinion piece in The New York Times, Jonathan Fenby, former editor of The Observer and The South China Morning Post and author of a book on China, said Xi's reemergence still leaves many questions unanswered.
"The way in which he remained out of sight for two weeks and the manner in which Beijing handled the episode provide important - and disturbing - indications of the way the world's last major ruling Communist Party operates," the author wrote. "It also demonstrates a serious systemic weakness that raises the risk premium in the world's second-largest economy."
Fenby said the Chinese leaders have not been able to quash the rumors kicked up after Xi's absence.
"In the past, the censors would have clamped down on the resulting speculation, but the breakneck development of social media in the People's Republic means that the old methods no longer function," he wrote.
"A rapidly evolving China increasingly escapes the party's traditional control mechanisms; the regime may lock up dissidents but it cannot ride herd on hundreds of millions of Internet users."
Fenby said there is still little known about what led to Xi's absence, which seemed to have been so sensitive the regime preferred to say nothing.