China on Tuesday ruled out prospects for fence-mending talks between its premier and Japan's leader this week in New York as the worst diplomatic crisis in years between the Asian powers deepened.

Japan urged all players in the dispute -- sparked by the arrest of a Chinese boat captain whose trawler collided with two Japanese vessels in disputed waters -- to avoid resorting to "extreme nationalism".

China has denounced the captain's arrest and repeatedly demanded his unconditional release, summoned Tokyo's ambassador no fewer than six times, and called off several official visits and planned negotiations.

On the cultural front, China has now cancelled an invitation to about 1,000 Japanese youths to the World Expo in Shanghai, and two concerts at the Expo next month by Japanese pop band SMAP have been cancelled.

"Obviously the atmosphere is not suitable for such a meeting," Chinese foreign ministry spokeswoman Jiang Yu told reporters, when asked if Premier Wen Jiabao and Japan's Prime Minister Naoto Kan could meet at the UN this week.

"The issue has severely hurt bilateral relations. In order to prevent a further deterioration of the situation, the key is that Japan should let the captain return immediately and unconditionally," Jiang said.

"Japan should understand the situation clearly."

In Tokyo, top government spokesman Yoshito Sengoku emphasised the importance of keeping nationalist sentiment at bay, after small groups of anti-Japanese demonstrators protested in three Chinese cities at the weekend.

"What is more important than anything is that government officials in charge should be careful not to arouse narrow-minded, extreme nationalism in Japan, China and other countries," said Sengoku, Japan's chief cabinet secretary.

Striking a more conciliatory tone, he stressed that a healthy relationship between China and Japan was indispensable for Asia's growth.

"We want to use all possible channels not to escalate the issue and to solve it for the sake of development in East Asia and the Asia-Pacific region," Sengoku told a regular news conference.

In a similar vein, Japan's Finance Minister Yoshihiko Noda said: "We must not escalate this emotionally. We should stay cool-headed, not let this issue influence economic relations."

The flare-up started with the September 7 collisions of a Chinese fishing trawler and two Japanese coastguard vessels near a disputed island chain that lies in rich fishing grounds and near possible oil and gas fields.

Japan arrested the captain, Zhan Qixiong, 41, early the next day, citing its domestic law. On Sunday, a court extended his detention until September 29, when he must be either indicted or released.

Japanese Foreign Minister Seiji Maehara on Sunday described the collisions as "gu-hatsuteki", a Japanese word which can be translated as incidental or unforeseen -- softer language than had been used before.

But Tokyo's outspoken conservative Governor Shintaro Ishihara said he would nevertheless cancel a scheduled October 12-13 visit to Beijing when the Chinese capital hosts a forum of mayors from 45 cities worldwide.

"I won't go. No matter what they (China) say about this, I won't go," he told reporters. Jiji Press reported he also likened Beijing's strong reaction to the captain's arrest to "what yakuza mobsters would do".

China has slammed the arrest as "illegal", and the dispute has highlighted broader tensions over the disputed island chain in the East China Sea, as a newly assertive Beijing flexes its diplomatic muscles.

Wen and Kan are due to meet separately with US President Barack Obama, whose government has called on China and Japan to resolve the issue through dialogue.

US Vice President Joe Biden on Monday sent a warm message to long-time ally Japan, stressing that Washington's ties with Tokyo were at the centre of US foreign policy in Asia.

"There is an emerging relationship that we have to get right between the United States and China... frankly, I don't know how that relationship can be made right other than going through Tokyo," Biden said.

Deputy Secretary of State James Steinberg said the flare-up was "unfortunate" in light of efforts by China and Japan to repair relations in recent years.

"Good relations between China and Japan are in our interest. It's in the interest of everybody else in the region," he said.

earlier related report
Major events in Japan-China maritime row
Tokyo (AFP) Sept 21, 2010 - Japan's arrest of a Chinese fishing boat captain in disputed waters two weeks ago has sparked the worst diplomatic row in years between the Asian giants. Here are major events in the dispute:

September 7:

Two Japan Coast Guard patrol vessels, the Yonakuni and the Mizuki, and a Chinese trawler collide in the East China Sea near a chain of disputed islands known as Senkaku in Japanese and Diaoyu in Chinese.

Japanese patrol boats chase the ship, stop it and take its captain and crew into custody, on suspicion the skipper deliberately rammed the boats.

China expresses "great concern", urges Japan to stop its "so-called law enforcement activities" and summons Japanese ambassador Uichiro Niwa.

September 8:

In the early hours, the Japan Coast Guard arrests Chinese captain Zhan Qixiong, 41, and takes him to Ishigaki island, while patrol ships escort his fishing boat with 14 crew there.

Japan informs China's ambassador Cheng Yonghua that "Tokyo will enforce its domestic laws" against the captain, who could face three years jail if charged with obstructing public officers on duty.

Some 35 Chinese protesters rally outside Japan's embassy in Beijing.

September 9:

Japanese prosecutors take over the case against Zhan.

China says Japan applying domestic law against him is "absurd, illegal and invalid" and warns of "a serious impact" to relations.

September 10:

In annual Defence of Japan report, Tokyo voices concern over Chinese naval activities and demands more transparency over its defence spending.

September 11:

A Chinese ship orders two Japan Coast Guard survey vessels to stop operations around 280 kilometres (175 miles) northwest of Okinawa. Tokyo launches a protest with Beijing.

China says it will postpone scheduled talks with Japan on jointly exploring gas fields, called Shirakaba by Japan and Chunxiao by China, in another disputed part of the East China Sea.

September 12:

China summons Japan's Niwa for a fourth time, in the early hours, warns Japan must make a "wise political decision".

September 13:

Japan releases the 14 Chinese crew but not the captain, and the men fly home on a Chinese government-chartered plane.

China's foreign ministry demands the skipper's release and says that "all the people of China... condemn the illegal Japanese behaviour in one voice."

September 14:

China announces senior lawmaker Li Jianguo has cancelled a Japan visit.

A Taiwanese boat carrying anti-Japanese protesters arrives at the disputed islands but turns back when confronted by Japan Coast Guard ships.

Japan's Prime Minister Naoto Kan survives a party leadership challenge.

The United States calls on both sides to resolve the row through dialogue.

September 17:

Japan says China has shipped drilling equipment to the disputed gas field.

Newly appointed Japanese Foreign Minister Seiji Maehara warns China against unilateral drilling activities.

September 18:

More than 100 Chinese activists rally non-violently near Japan's embassy in Beijing, on the anniversary of Japan's 1931 invasion of Manchuria. Smaller protests are held in Hong Kong, Shanghai and Shenyang -- in northeast China.

September 19:

A Japanese court authorises a 10-day extention of Zhan's detention until September 29, when he must be indicted or freed.

September 21:

Japan's top government spokesman calls for calm and urges all sides to avoid arousing "narrow-minded, extreme nationalism".

Japanese pop band SMAP cancels planned Shanghai concerts next month.

China rules out a meeting at the UN general assembly later in the week between premiers Kan and Chinese Premier Wen Jiabao, saying "the atmosphere is not suitable".