When the Na'vi salute each other in this fashion it transcends physical sight of the person. It literally means seeing into the other person's soul. Believe it or not it is very customary to say that the eyes are the windows to the soul and it does have some credence when one look into the eyes of despots and criminals anyone can clearly see and feel the darkness that dwells inside such individuals.
It has also been used in films and TV shows for quite sometime one example would be the TV show Buffy the vampire slayer. When Spike got a soul and stopped being a soulless fiend Anja immediately recognized he was changed so much that she says the words "I can see you!" even though she had seen Spike physically many times before.