French Lance Corporal Jules-Andre Peugeot and German Sub-Lieutenant Albert Mayer were both killed on the eve of the outbreak of the 1914-18 war.
The commemoration took place in the northeastern French border town of Joncherey, near Belfort, where the German officer led a reconnaissance mission into French territory on August 2, 1914.
While Peugeot is remembered here every year, this was the first time that representatives from the two countries joined to remember the losses on both sides that day.
As Europe prepared for war, Mayer was the officer in charge of a small group of mounted soldiers who crossed over the border into France only to come face-to-face with a local surveillance unit.
Also Read
Peugeot and Mayer exchanged fire, the former being killed instantly while the latter died after coming under further French fire.
The reason for the incursion remains unclear since Germany did not declare war on France until the following day, August 3, 1914.
"This is an incident that should not have happened. It is important to tell the younger generation about it," said Gilles Maire, a retired lieutenant-colonel who helped organise today's commemoration.