By David Alexander
BEIJING (Reuters) - U.S. Defense Secretary Leon Panetta urged China on Tuesday to allow closer military contacts to reduce the risk of confrontation, as the two powers grapple with a volatile territorial dispute between Beijing and Tokyo.
Panetta's trip to Beijing for talks with senior Chinese military and government leaders has coincided with an eruption in tension over rival claims by Japan and China to a cluster of islands in the East China Sea.
He told Defence Minister Liang Guanglie that Washington and Beijing should foster closer military contacts and avoid misunderstandings that could spiral into confrontation.
"Our goal is to have the United States and China establish the most important bilateral relationship in the world, and the key to that is to establish a strong military-to-military relationship," Panetta said in opening remarks that reporters were allowed to observe.
Pentagon officials have long complained that China has not been candid enough about its rapid military build-up, whereas Chinese officials have accused Washington of viewing their country in suspicious, "Cold War" terms.
"The key is to have senior level actions like we are engaging in that reduce the potential for miscalculation, that foster greater understanding and that expand trust between our two countries," Panetta said.
Over past days, anti-Japan protests have erupted across China, including attacks on Japanese cars and restaurants.
They were triggered by anger over Japan's decision last week to buy a tiny group of disputed islands - which Tokyo calls Senkaku and Beijing calls Diaoyu - from a private Japanese owner.
In the initial remarks open to reporters, Panetta did not mention that dispute. Instead, he stressed a positive message that the United States and China share common ground on regional issues.
"China is a Pacific power and so is the United States and we share common concerns in this region," he said. "Concerns related to terrorism, to nuclear proliferation, to humanitarian relief, to drug trafficking, peace keeping and other issues."
In Tokyo on Monday, however, Panetta expressed concern about the mounting tensions between Beijing and Tokyo, and urged calm and restraint.
The Japanese government has said that Tokyo and Washington agree that the disputed islands are covered by a U.S.-Japan security treaty. Panetta said that while his government stood by its obligations under the treaty with Japan, it did not take any side over who had sovereignty over the islands.
China has said Washington should not become involved in the quarrel. "We hope that the U.S. will truly abide by the principle of not taking sides over the question of who the Diaoyu islands belong to," the Chinese Foreign Ministry spokesman Hong Lei told a daily briefing on Monday.
(Writing and additional reporting by Chris Buckley, Editing by Jonathan Thatcher)