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BEIJING (Reuters) - China has blasted a U.S. State Department report that criticized its controls on religion, saying on Thursday that the document was prejudiced and an attempt to meddle in domestic affairs.

The Chinese Foreign Ministry's condemnation of the International Religious Freedom Report released this week was predictable -- and the latest reminder of how human rights issues remain a chronic irritant between Washington and Beijing.

The annual report issued on Monday found a "marked deterioration" in state respect for religious freedom in China in 2011, and cited tighter restrictions on religion, especially in Tibetan Buddhist monasteries and nunneries.

Chinese Foreign Ministry spokesman Hong Lei adamantly disagreed.

"Chinese people of every ethnicity enjoy full freedom of religion and faith," Hong said in comments issued on the ministry's website (http://www.mfa.gov.cn).

"The U.S. side should abandon its prejudices," he added.

"Stop exploiting religious issues to meddle in China's internal affairs, and don't do things that harm Sino-American relations and mutual trust and cooperation."

Tension between China and the United States spans issues such as the U.S. trade deficit, American arms sales to Taiwan, and mutual wariness over regional intentions and military plans.

U.S. criticism in the report included a claim that "official interference in the practice of these religious traditions exacerbated grievances and contributed to at least 12 self-immolations by Tibetans in 2011."

Since March 2011, there have been more than 40 self-immolations by Tibetans, including Buddhist monks and nuns, reflecting anger over Chinese controls.

After a meeting on human rights in late July, the U.S. Assistant Secretary of State Michael Posner said Beijing was moving in the wrong direction on human rights.

(Reporting by Chris Buckley; Editing by Ed Lane)

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