U.S. Secretary of State Hillary Clinton, who met her Chinese counterpart, Yang Jiechi, in Hanoi last week, urged calm on both sides, and offered to host trilateral talks to bring relations back on an even keel.
Chinese Foreign Ministry spokesman Ma Zhaoxu said that this was only "a U.S. idea", adding that it was "totally wrong" to include the disputed islands in any U.S.-Japan defence agreements.
"It must be pointed out that the Diaoyu islands are Chinese territory, and the dispute between China and Japan over them is one between the two countries," he said in a statement on the Foreign Ministry's website (www.mfa.gov.cn).
"The U.S. side has suggested official talks between the United States, China and Japan. I want to stress this is only a U.S. idea," Ma said.
"The United States has many times said that U.S.-Japan security treaties can apply to the Diaoyu islands. This is totally wrong. The U.S. side should immediately correct this mistaken position," he added.
Sino-Japanese relations dived after Japan detained a Chinese skipper in September after his fishing boat collided with two Japanese patrol ships near disputed isles in the East China Sea that are called Diaoyu in China and Senkaku in Japan.
Japan and the United States have close military links, and there are numerous U.S. military bases in Japan.
(Reporting by Ben Blanchard and Huang Yan; Editing by Kim Coghill)