Rachel Bilson & Chace Crawford: Dinner Date with Friends!

Newly single Rachel Bilson was spotted sitting next to Chace Crawford while dining with a group of friends at NYC’s The Lion on Friday (September 10).

“The two arrived [and left] together,” an eyewitness tells Life & Style. “There was lots of flirting going on between the two of them; the attraction was obvious. They kept giggling. It was very sweet.”

Rachel, 29, and Chace, 25, were also spotted at Karl Lagerfeld‘s party at the Soho Chanel boutique the night before!

Rachel and ex-fiancé Hayden Christensen called off their engagement last month.

Pictured here: Rachel and Chace at the 2008 Teen Choice Awards on August 3, 2008 in L.A.

UPDATE: Rachel‘s rep says that they are “100% not dating. She’s been friends with his manager and has known Chace for a while. It was simply a friendly dinner.” All you Chace and Rachel shippers can go cry a river now!