PHNOM PENH (Reuters) - The United States and China signalled a willingness on Thursday to work together on "sensitive issues" in a move to cool tensions between rival claimants to the potentially oil-rich and increasingly militarised South China Sea.
Long-simmering tensions in the waters have entered a more contentious chapter this year as the six parties who claim the territory search deeper into the disputed waters for energy supplies while building up their navies and defence alliances.
Chinese Foreign Minister Yang Jiechi said Beijing was ready to work with Washington "to expand our common ground, respect each other, properly handle differences on sensitive issues, and push forward" relations.
Echoing Yang's conciliatory tone, U.S. Secretary of State Hillary Clinton said "the United States and China not only can, but will work together in Asia".
"No nation can fail to be concerned by the increase in tensions, the uptick in confrontational rhetoric, and disagreements over resource exploitation," Clinton told a news conference, referring to the South China Sea dispute.
"We have seen worrisome instances of economic coercion and the problematic use of military and government vessels in connection with disputes among fishermen."
Clinton, who joined regional foreign ministers at a forum in the Cambodian capital of Phnom Penh, called on all parties to refrain from issuing threats, and advocated all-party dialogue to address rival claims to the waters.
Her stance was likely to upset Beijing which wants to take a bilateral approach to resolving the row.
Clinton, however, said attempts to solve the problems bilaterally "could be a recipe for confusion and even confrontation".
The pledges by China and the United States to cooperate could cool tempers for now, but the maritime issue is extremely complex and sensitive, and could take years to resolve.
Beijing claims the South China Sea as its territory based on historical records and has said China has "indisputable sovereignty" over the area.
The Philippines and China only recently stepped back from a months-long standoff at the Scarborough Shoal, a horseshoe shaped reef in waters they both claim -- the latest round of naval brinkmanship over the heavily trafficked waters.
The United States has stressed it is neutral in the long-running maritime dispute, despite offering to help boost the Philippines' decrepit military forces. China has warned that "external forces" should not get involved.
Vietnam, Malaysia, Brunei and Taiwan also lay claim to parts of the South China Sea.
CLAIMANTS SEEK CODE OF CONDUCT
Proven and undiscovered oil reserve estimates in the area range as high as 213 billion barrels of oil, the U.S. Energy Information Administration said in a 2008 report. That would surpass every country's except Saudi Arabia and Venezuela, according to the BP Statistical Review.
U.S. President Barack Obama has sought to reassure regional allies that Washington would serve as a counterbalance to a newly assertive China in the South China Sea, part of his campaign to "pivot" U.S. foreign policy more intensely on Asia after a decade of war in Iraq and Afghanistan.
The United States says stability is its concern in the waterway, which carries $5 trillion in ship-borne trade, accounting for half the world's shipping tonnage.
The 10-state Association of Southeast Asian Nations (ASEAN) bloc is seeking a maritime code of conduct for the seas and wants China to be involved in the consultation, but it has yet to commit to the process, which has so far been vague.
A U.S. official on Thursday said Yang had given Clinton a "careful indication" China was willing to work with Southeast Asian countries as a group on the proposed code of conduct. The official said China had suggested to other countries it could start talks on the issue in September.