US Secretary of State Hillary Clinton urged Chinese Foreign Minister Yang Jiechi Thursday to work to calm simmering tensions between China and Japan over disputed islands in the East China Sea.

"The secretary, as she has been urging for a number of months ... again urged that cooler heads prevail. That Japan and China engage in dialogue to calm the waters," a senior State Department official said after the talks.

"We believe that Japan and China have the resources, have the restraint, have the ability to work on this directly and take tensions down. And that is our message to both sides."

Earlier Thursday, China criticized Japanese Prime Minister Yoshihiko Noda for his "obstinate persistence" after he insisted there could be no compromise with Beijing on the ownership of disputed islands.

"China is extremely dissatisfied with and sternly opposes the Japanese leader's obstinate persistence in his incorrect views regarding the Diaoyu islands," foreign ministry spokesman Qin Gang said in a statement.

Noda had said on Wednesday that a disputed archipelago in the East China Sea that China knows as the Diaoyu islands and Japan calls the Senkaku, is "an integral part" of Japanese territory "in the light of history and of international law."

Clinton and Yang met in a New York hotel on the sidelines of the General Assembly and for what a US official described as a "very full meeting."

They also talked about issues concerning the South China Seas, North Korea, human rights in China and Tibet and bilateral economic relations.

Yang met on Tuesday with his Japanese counterpart Koichiro Gemba, holding what was described as "stern talks" on the bitterly disputed islands but made no breakthrough, diplomats said.

Yang accused Japan of committing a "gross violation" of China's territorial integrity during the meeting, according to China's state Xinhua news agency.

Gemba said there was a "severe" atmosphere for the talks, which lasted for about about one hour. Clinton is due to meet with Gemba on Friday.

China has been infuriated by the Japanese government's move to buy the East China Sea islands from a private owner.

Japan and China have disputed the islands for decades but tensions flared again in recent weeks leading to street protests in Chinese cities.

Chinese government ships have sailed into waters around the disputed islands in recent days, along with vessels from Taiwan, which also claims the islands.