Nusa Dua, Indonesia: Tension between the US and China spilled over into meetings of Asia-Pacific leaders on Friday as the two countries jostled over how to handle competing claims to the South China Sea.

Sensitive issue: Chinese Premier Wen Jiabao (left) and US President Barack Obama before the East Asia Summit gala dinner at Nusa Dua. By Larry Downing/Reuters

“It ought to be resolved through friendly consultations and discussions by countries directly involved. Outside forces should not, under any pretext, get involved," Wen told a meeting with South-East Asian leaders, several of whose countries claim sovereignty to parts of the South China Sea.

The speech transcript was carried on the Chinese foreign ministry’s website.

The remark is the latest barb between the two countries in recent weeks, and comes as President Barack Obama has sought to reassert the US presence in the Asia-Pacific region to counter the growing influence of the world’s second largest economy, China.

Obama said in Australia on Thursday, on his last stop before jetting to the Asia meetings in neighbouring Indonesia, that the US military will expand its Asia-Pacific role, declaring America was “here to stay" as a Pacific power.

Days earlier, as host of the Asia-Pacific Economic Cooperation forum in Hawaii, Obama had voiced frustration at China’s trade practices and pushed for a new Asia-Pacific trade deal with some of Beijing’s neighbours.

The moves are seen as an attempt to reassert US leadership in the face of China’s rising influence around the Pacific Rim and to reassure allies such as South Korea and Japan that it will remain a strong counterweight.

The US wants the dispute over the South China Sea discussed at the Indonesian resort island of Bali at meetings of the 10-member Association of Southeast Asian Nations (Asean) and eight regional powers, including the US, China, Russia and Japan.

Bilateral meetings were held on Friday before a full East Asia Summit on Saturday.

Vietnam, the Philippines, Taiwan, Malaysia and Brunei are the other claimants to parts of the South China Sea, a major route for some $5 trillion in trade each year and potentially rich in resources.

The South-East Asian countries, along with the US and Japan, are pressuring China to try to seek some way forward on the knotty issue of sovereignty, which has flared up again this year with often tense maritime stand-offs that an Australian think tank said could lead to conflict.

Separately, Indian Prime Minister Manmohan Singh told President Obama that there were “no irritants whatsoever" in ties between the two nations. He also told him that India had gone “some way" to allay the concerns of US firms by notifying rules for nuclear business and any specific grievance will be addressed within the “four corners" of Indian laws.

The issue came up during a more than one-hour meeting between Singh and Obama against the backdrop of apprehension among US firms that Indian liability laws were not supplier-friendly.

“I explained to him (Obama) that we have a law in place. Rules have been formulated. These rules will lie before our Parliament for 30 days," Singh told reporters after his meeting with Obama. “Therefore, we have gone some way to respond to the concerns of American companies, and within the four corners of the law of the land, we are willing to address any specific grievances,"

The rules, which were notified on Wednesday, make it clear among other things that there would be no unlimited or unending liability on part of the suppliers.

Singh said he had also told Obama that India was ready to ratify the Convention on Supplementary Compensation, another issue that the US wants to be done as a part of implementation of the civil nuclear deal.

PTI contributed to this story.