By Prak Chan Thul and Stuart Grudgings
PHNOM PENH (Reuters) - A Southeast Asian regional summit ended in acrimony on Friday over China's assertive role in the strategic South China Sea, failing to agree on a concluding joint statement for the first time in its 45-year history.
Divisions between the 10 countries in the Association of Southeast Asian Nations (ASEAN) follow a rise in incidents of naval brinkmanship involving Chinese vessels in the oil-rich waters that has sparked fears of a military clash.
The Philippines said it "deplores" ASEAN's failure to address the worsening row, and criticized Cambodia -- a close ally of China -- for its handling of the issue during the foreign ministers' meeting.
Without mentioning China, Philippine Foreign Minister Albert del Rosario told a news conference in Manila that one "member state's" intrusions into Philippine territory were part of a "creeping imposition" of its claim over the entire South China Sea and were raising the risk of a conflict.
The South China Sea has become Asia's biggest potential military flashpoint as Beijing's sovereignty claim over a huge, looping area has set it against Vietnam and the Philippines as the three countries race to tap possibly huge oil reserves.
The stakes have risen as the U.S. military shifts its attention and resources back to Asia, emboldening its long-time ally the Philippines and former foe Vietnam to take a bolder stance against Beijing.
ASEAN's divisions are an ominous sign for a bloc that wants to create a regional economic community by 2015 that would bring down barriers in trade, labor and financial markets -- partly to compete with China for investment.
China is a member of the East Asian Summit and ASEAN Regional Forum which also held meetings in Cambodia.
"The increasing assertion by this member state over the disputed and non-disputed areas poses a threat to the peace and stability in the Asia-Pacific region," del Rosario said.
"If left unchecked, the increasing tension that is being generated in the process could further escalate into physical hostilities which no one wants."
China has been accused of using its heavy influence over summit chair Cambodia and several other ASEAN members to block regional-level discussions on the issue and attempts to agree a binding maritime Code of Conduct to manage the dispute.
The Philippines said it took "strong exception" to Cambodia's statement that the non-issuance of a communique was due to "bilateral conflict between some ASEAN member states and a neighboring country".
It said it had only requested that the communique mention the recent standoff between Chinese and Philippine ships at the Scarborough Shoal, a horseshoe-shaped reef in waters that both countries claim.
Indonesia, the biggest economy in Southeast Asia, played down the rift. "No doubt the South China Sea at the moment is a difficult issue but I'm sure ASEAN will find ways and means to be able to address that problem," Indonesian Foreign Minister Marty Natalegawa told Reuters.
But the rising tensions were underlined on Friday when the Chinese navy said that one of its frigates had run aground on Half Moon Shoal, about 90 nautical miles off the western Philippine island of Palawan.
China said it was conducting a rescue mission and the Philippines said it was sending "assets" to the area to investigate and provide assistance if needed.
"That's a very strategic location to strengthen their claim over the Reed Bank, they are getting closer to our territory, putting one foot inside our fence," one military official told Reuters.
The Philippines scrambled aircraft and ships to the Reed Bank area last year after Chinese navy ships threatened to ram a Philippine survey ship.
China said last month it had begun "combat-ready" patrols in waters it said were under its control in the South China Sea, after saying it "vehemently opposed" a Vietnamese law asserting sovereignty over the Paracel and Spratly islands.
Philippine President Benigno Aquino told Reuters in an interview last week that he may ask the United States to deploy spy planes to monitor the disputed waters.
China, whose trade and investment ties with Cambodia have surged in recent years, has warned that "external forces" should not get involved in the dispute, which it says should only be discussed bilaterally. Vietnam, Malaysia, Brunei and Taiwan also lay claim to parts of the South China Sea.
Vietnam's Foreign Minister Pham Binh Minh said he was "very disappointed" over the failure to issue a statement.
In a statement issued late on Thursday, Chinese Foreign Minister Yang Jiechi repeated that there was "no dispute" about China's sovereignty over Scarborough Shoal.
"China hopes the Philippine side faces the facts squarely and stops creating trouble," he added.
The United States has stressed it is neutral in the long-running maritime dispute, despite offering to help boost the Philippines' decrepit military forces. It says freedom of navigation is its main concern about a waterway that carries $5 trillion in trade - half the world's shipping tonnage.
(Stuart Grudgings reported from Kuala Lumpur.; Additional reporting by Manuel Magato in Manila, Ben Blanchard in Beijing and Olivia Rondonuwu in Jakarta; Editing by Jason Szep and Jeremy Laurence)