"There are serious difficulties between China and Japan at the moment," Vice-Foreign Minister Wu Dawei said on Monday.
"It is the most difficult time since the establishment of diplomatic ties in 1972 ... the reason is that the Japanese government cannot correctly handle the historical question, that is, the history of Japanese militarism's invasion of China."
China has allowed widespread anti-Japanese protests over the past three weeks and on Sunday the government rejected Japan's demands for an apology and compensation for damage and occasional violence caused by the demonstrators.
"If anyone should apologise, Japan should apologise first," said Wu.
Not too far
Meanwhile, the ruling Communist Party-run People's Daily said in an editorial on Monday that while Chinese demonstrators were correct in expressing anti-Japanese feelings, "extreme actions" were counter-productive to resolving the issues.
"It is the most difficult time since ... 1972 ... the reason is that the Japanese government cannot correctly handle the historical question ... of Japanese militarism's invasion of China"
Chinese vice-foreign minister
"As our dignity and national feelings have been seriously hurt, it is just for us to express our anger.
"But to adopt certain extreme actions that violate the law does not help solve the issue," the editorial posted on the paper's website late on Sunday said, after protesters hurled stones, bottles and paint at the Japanese consulates in the cities of Shanghai and Shenyang.
Japanese Foreign Minister Nobutaka Machimura was holding a second day of talks with Chinese leaders in Beijing on Monday, with both sides insisting that the other take concrete measures to move relations forward.
On Sunday, Chinese Foreign Minister Li Zhaoxing delivered the blunt message to his Japanese counterpart.
"The Chinese government has never done anything for which it has to apologise to the Japanese people," Li told his Japanese guest.
"The main problem now is the Japanese government has done a series of things that have hurt the feelings of the Chinese people, on the Taiwan issue, some international issues including human rights and especially in its treatment of history," Li said.
Beijing is incensed over Tokyo's approval of a nationalist Japanese school textbook which critics say glosses over wartime atrocities. It is also opposed to Japan's bid for a permanent seat on the United Nations Security Council.
Machimura is in Beijing for talks
with Chinese leaders
Tokyo said on Monday that it still wanted an apology from China for the sometimes violent anti-Japan protests.
Chief Cabinet Secretary Hiroyuki Hosoda said it was "very regrettable" that China did not apologise at the meeting between Li and Machimura.
Anti-Japan violence should not be condoned under any circumstances, Hosoda said. "There is no change in our basic policy" of seeking an apology, he added.
Japanese Prime Minister Junichiro Koizumi said on Monday that a possible bilateral summit with Chinese President Hu Jintao this week should be forward-looking and aimed at promoting friendly relations.
"A meeting that becomes like an exchange of criticism is not
positive," Koizumi said.
"When thinking about future friendship, I think such a meeting should be a forward-looking meeting about how to boost friendly relations," he added.
The Japanese leader said efforts were still being made to arrange the possible summit with Hu later this week when the two are in Indonesia for a multilateral meeting.
Also on Monday, new US ambassador to Japan Thomas Schieffer expressed Washington's concern about the growing tension between the two Asian countries.
"We are concerned about the tension that exists here recently," Schieffer said.
Some of the anti-Japanese
protests have turned violent
"I think the Chinese and Japanese will have to come to a
conclusion on how to handle this issue. Having said that, stability of Asia is important. Peace of Asia is important for the United states. We hope by the end of the day, China and Japan can work together," he said.
Schieffer added that the tension should not affect the six-nation talks on North Korea's nuclear ambitions which are hosted by Beijing and include Japan, the US, Russia and the two Koreas.