Japan sparked outrage after it announced plans to purchase the Senkaku Islands, known in China as Diaoyu. The countries have debated territorial rights to the uninhabited, but energy-rich, islands.
"We pay close attention to the development of the issue and we reserve the right to take further actions but we hope the issue will be properly resolved through peaceful ways and negotiations," he was quoted by China's official Xinhua News Agency as saying.
He said Beijing had a clear territorial claim to the islands, adding Japan was "heating up" the issue by its plans to acquire the land.
Victoria Nuland, a spokeswoman for the U.S. State Department, said Washington was "concerned" about the tensions over the islands.
"We are going to continue to counsel Japanese leaders and Chinese leaders to talk to each other and try to work through these issues through dialogue," she said.