Chinese ships have entered waters near a group of disputed islands for the first time in three weeks, prompting a strong protest from Japan, which says China's air force has also sharply increased its operations in the area.
Japan's Coast Guard said the four Chinese surveillance ships were spotted within a 22km zone that Japan considers its territorial waters near one of the disputed islands in the East China Sea early on Thursday morning.
The ships refused to leave, saying the area was Chinese territory, according to Atsushi Takahashi, a spokesman for the Coast Guard's headquarters in Okinawa, which has jurisdiction over the islands.
He said it was the first time Chinese ships had entered the territorial waters since October 3.
Japan's foreign ministry lodged a strong protest with China's ambassador in Tokyo.
"Both sides have a lot at stake in this dispute. On one hand both have to appease their public, but on the other side they have huge trade ties and they cannot afford for the economy to be affected," Al Jazeera's Divya Gopalan reported from Hong Kong.
The naval activity near the uninhabited islands called the Senkaku in Japan and the Diaoyu in China comes after officials from Japan and China held talks last week in Shanghai to discuss the dispute.
The dispute has heightened tensions between the nations in recent months.
Chinese ships have been frequenting waters near the islands, also claimed by Taiwan, since Japan's government nationalised them last month, a decision that touched off violent demonstrations across China.
The ships have generally kept out of the 22km zone, however.
Japanese air force officials, meanwhile, say there has also been a surge recently in Chinese air operations resulting in emergency "scrambles" by Japanese fighter jets to keep them from entering Japan's airspace.
According to statistics released by the defence ministry, fighters were dispatched 54 times between July and September in response to possible incursions of Japanese airspace by Chinese warplanes.
That was up sharply from the three previous months, before the tensions heightened, when there were 15 such scrambles.
A ministry official said virtually all of the incidents were in airspace over the East China Sea.
Both countries have been flexing their military muscles to bolster their claims to the islands, which are strategically located and surrounded by rich fishing grounds, along with potentially lucrative reserves of undersea natural resources.
Last week, China held exercises involving 11 vessels from its East China Sea fleet and the civilian marine surveillance and fishery administration agencies, along with eight aircraft, state media said.
While the exact location of the exercises was not known, state TV showed the vessels and aircraft operating near shore, not on the high seas or close to the disputed islands.