Beijing accused Tokyo Thursday of mounting a smear campaign after Japan said a Chinese frigate had locked its weapons-targeting radar on a Japanese warship in a "threat of force".

The world's second- and third-largest economies are at loggerheads over uninhabited Japanese-controlled islands in the East China Sea, known as Senkaku in Tokyo and Diaoyu by Beijing, which claims them.

The radar incident, which Japan said happened last week, marked the first time the two nations' navies have locked horns in a dispute that has some commentators warning about a possible armed conflict.

Asked to respond to Japanese Defence Minister Itsunori Onodera's description of the radar targeting as a "threat of force", Beijing foreign ministry spokeswoman Hua Chunying said: "Recently Japan has been hyping up crisis and deliberately creating tension to smear China's image.

"This move is counter to the improvement of relations," she told a regular briefing.

"The current problem is not China being assertive but about Japanese ships' and airplanes' repeated illegal activities in the airspace and waters of the Diaoyu islands, which undermine China's territorial sovereignty."

The long-running row over the islands intensified in September when Tokyo nationalised part of the chain, triggering fury in Beijing and huge anti-Japan demonstrations across China.

Beijing has repeatedly sent ships and aircraft near the islands and both sides have scrambled fighter jets, though there have been no clashes.

Japan's Prime Minister Shinzo Abe said Thursday the "window for dialogue" must remain open but reiterated his rebuke to Beijing over the "extremely regrettable" naval confrontation.

"But we will not close the window of dialogue. This is most important," said Abe. "I would like China to return to a more open attitude towards our strategic partnership."

Abe Wednesday had described the Chinese action as "dangerous" and "provocative".

Onodera told parliament on Thursday the Chinese radar lock amounted to a "threat of force", but also called for some mechanism to allow defence authorities to communicate with each other.

"We think this is a threat of force, as defined in the UN Charter.

"But what is most important is to prevent incidents like this from recurring in the future," he said. "I also think it is necessary for Japan and China to have a means of consultation on maritime safety issues."

In Washington, US Defense Secretary Leon Panetta on Wednesday urged China to avoid confrontation and seek peaceful dialogue with Japan and other countries over territorial disputes.

Asked about the China-Japan tensions, Panetta voiced concern that "it's the kind of situation where there are territorial claims that could ultimately get out of hand".

He added: "One country or the other could react in a way that could create an even greater crisis."

The US defence chief said China, the United States and other countries should work together to address "common challenges," including piracy, natural disasters and territorial disputes."

China's premier-in-waiting Li Keqiang, meanwhile, urged marine surveillance staff on Thursday to intensify law enforcement in China's sea territories, according to the official Xinhua news agency.

"Supervising and governing seas under the jurisdiction of China is the main responsibility of Chinese marine surveillance staff," Li, who is expected to take over as China's premier next month, was quoted as saying.

It is believed the island chain -- which is also claimed by Taiwan -- sits atop vast mineral reserves.