The foreign ministers of China and Japan will hold talks on Wednesday, four days after Japan's announcement of its plan to "nationalize" China's Diaoyu Islands, media reports said.

Japanese Prime Minister Yoshihiko Noda said on Saturday that his cabinet is seeking to "nationalize" part of the islands.

The talks are expected to take place on the sidelines of the series of foreign ministers' meetings of the ASEAN Regional Forum in Phnom Penh, Cambodia.

Beijing has lodged solemn representations to Tokyo and said "nobody is ever allowed to trade in China's sacred territory".

Yet Japanese Cabinet Secretary Osamu Fujimura on Tuesday morning confirmed to Japan's House of Representatives for the first time the ongoing discussion of the plan to "nationalize" the islands, Japan's Yomiuri Shimbun newspaper website reported.

"China will keep a close watch on the islands' situation and will respond accordingly to the varying situations to ensure the country's territorial sovereignty," said Foreign Ministry spokesman Liu Weimin, when asked whether China will take countermeasures.

In April, Tokyo Governor Shintaro Ishihara initiated a campaign to buy the islands, eliciting protests from Beijing and stirring up tensions in bilateral ties.

Kyodo News Agency quoted a senior official at the US State Department on Monday, who said that the islands "fall within the scope" of Article 5 of the 1960 US-Japan Treaty of Mutual Cooperation and Security.

The official said the islands "have been under the administrative control of the government of Japan since they were returned (by the US) as part of the reversion of Okinawa in 1972".

Beijing on Tuesday expressed "grave concern and strong opposition" to the related remarks.

The deal between the US and Japan after World War II is "illegal and invalid", Liu said.

The US-Japan Treaty of Mutual Cooperation and Security is a bilateral agreement that was reached by the two countries during the Cold War, and "it should not harm the interests of any third parties, including China".

"We hope the US and Japan do more to contribute to regional peace and stability," the spokesman added.

He reiterated that the islands and its affiliated islets have been China's inherent territory since ancient times, over which China has indisputable sovereignty.

The treaty requires the US to defend Japan in the event of armed attacks, according to Kyodo.

The Foreign Ministry on Tuesday also said a drill by the Chinese navy to be held soon in waters of the East China Sea "is not aimed at any other specific country or region".

The Defense Ministry on Monday said the planned drill, in waters near Zhoushan, East China's Zhejiang province, is part of its annual exercise plan.

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