China warned Saturday that American criticism of its decision to set up a new military garrison in the South China Sea sent the "wrong signal" and threatened peace in the hotly disputed waters.
Washington on Friday accused Beijing of raising tensions in the sea after it announced last week the establishment of the tiny city of Sansha and a garrison on an island in the disputed Paracel chain.
The move has infuriated Vietnam and the Philippines who accuse Beijing of stepping up harassment at sea.
But China reacted angrily to the American intervention, with the foreign ministry voicing its "strong dissatisfaction and opposition", the official Xinhua news agency reported.
In a strongly worded statement, ministry spokesman Qin Gang warned that the US remarks had sent a "seriously wrong signal" which could undermine efforts aimed at "safeguarding the peace and stability of the South China Sea".
China says it controls much of the sea, but Brunei, Malaysia, Taiwan, the Philippines and Vietnam all claim portions.
State Department spokesman Patrick Ventrell said in a statement Friday the US was "concerned by the increase in tensions in the South China Sea and are monitoring the situation closely".
Ventrell said the establishment of the garrison and Sansha "runs counter to collaborative diplomatic efforts to resolve differences and risk further escalating tensions in the region".
He also pointed to "confrontational rhetoric" and incidents at sea, saying: "The United States urges all parties to take steps to lower tensions."
Also on Saturday, a commentary on Xinhua said the US accusations were "groundless and irresponsible" and urged Washington to "draw back its meddling hand from the South China Sea disputes".
The United States has rallied behind Southeast Asian nations, expanding military ties with the Philippines and Vietnam. In April, the first of 2,500 US Marines touched down in Australia in a further show of US power in Asia.
The US Senate approved a resolution late Thursday that "strongly urges" all regional nations to exercise self-restraint and to refrain from permanently inhabiting points in the South China Sea until a code of conduct is reached.
The resolution, sponsored by senators from both major parties, declared that the United States was committed "to assist the nations of Southeast Asia to remain strong and independent".
During a 2010 visit to Vietnam, Secretary of State Hillary Clinton declared that the United States had a national interest in freedom of navigation in the South China Sea, through which half of world cargo passes.
The State Department statement on Friday reiterated that the United States has an interest in stability and "unimpeded lawful commerce" in the South China Sea but that Washington does not take a position on rival claims.
Southeast Asian nations faced deep divisions last month during annual talks in Cambodia, preventing them from issuing a customary joint communique and holding up progress on reaching a code of conduct with China.
The code of conduct would aim to set rules to reduce the chances of a spat over fishing, shipping rights or oil and gas exploration tipping into an armed conflict.
