A late night Sunday telephone call between US President Barack Obama and his Chinese counterpart Hu Jintao underscored the mounting tensions between the two countries in the wake of last month’s military clash between North and South Korea.

The White House and the Chinese Foreign Ministry each issued one-sided accounts of the telephone conversation, illustrating the deep gulf dividing Washington and Beijing over the crisis on the Korean peninsula.

The White House statement stressed that Obama had condemned the artillery attack carried out by North Korea on Yeongpyeong Island in the Yellow Sea on November 23, in which two South Korean soldiers and two civilians died. The US president demanded that the North Korean government in Pyongyang “halt its provocative behavior.”

“He urged China to work with us and others to send a clear message to North Korea that its provocations are unacceptable,” the statement said. “The president also highlighted the American commitment to the security of its allies in the region.”

For his part, Hu issued a stark warning. “Especially if not dealt with properly, tensions could well rise on the Korean peninsula or spin out of control, which would not be in anyone’s interest,” Hu was quoted as saying by the Chinese Foreign Ministry.

According to this account, Hu told Obama that China was “deeply worried” about the situation in the region.

While expressing China’s regret over the deaths in the artillery exchange, Hu made no condemnation of North Korea. Beijing has not affixed blame for the incident, which North Korea claimed was provoked by a South Korean military exercise that, according to Pyongyang, included the firing of South Korean artillery on Yeongpyeong Island into North Korean waters.

Yeongpyeong Island lies near the so-called Northern Limit Line, a maritime border that the US military unilaterally imposed at the end of the Korean War in 1953. North Korea has never accepted the division, insisting that the border should lie further south.

A series of military exercises in the region have continued to ratchet up tensions between the two Koreas as well as between Washington and Beijing.

On Monday, South Korea’s military launched week-long maritime live-fire exercises that involve shelling in 29 separate areas in waters off the Korean coast.

The South Korean Joint Chiefs of Staff stated that, while this round of exercises will not include artillery fire in the waters off Yeongpyeong Island, where the military confrontation with the North erupted last month, another live-fire exercise that will include the island is to be staged soon.

South Korea’s new defense minister, Kim Kwan-jin, dismissed North Korean warnings over the new war games. “I don’t care about North Korean responses and they are not worth considering,” he said.

Pyongyang on Sunday condemned the live-fire drills, charging that the South was “hell-bent on the moves to escalate the confrontation and start a war.”

Kim, a former army general, was installed as defense minister after his predecessor resigned amid charges in the media and government that he had not responded aggressively enough to the North Korean shelling of Yeongpyeong.

The new defense minister has issued a series of bellicose statements vowing to retaliate with even greater force against any new North Korean attack. New artillery fire, he threatened, would be answered by the South Korean air force bombing North Korea. “The principles of proportionality and necessity do not apply,” Kim said. “The extent to which we invoke the right of self-defense is until the enemy’s resolve to provoke is eliminated.”

He added, “If North Korea carries out a military provocation targeting our territory and citizens again [we] need to punish them with immediate and powerful reaction until they completely give in.”

Meanwhile, US and Japanese armed forces continued military exercises begun last Friday involving some 40,000 military personnel. The war games, led by the aircraft carrier USS George Washington and its battle group, include the simulated defense of an island—an exercise that seems pointedly directed at China, given the tensions between Beijing and Tokyo over disputed islands in the East China Sea. These tensions boiled over last September following Japan’s arrest of a fishing captain after a collision between his boat and Japanese coast guard vessels.

The exercises were significant for the participation of South Korean military observers. Relations between the two countries have been historically strained. Japan’s 35-year colonial occupation of Korea ended only with the Japanese defeat in World War II.

Tokyo is reportedly also preparing to issue a new rearmament plan directed against China and North Korea. According to Nikkei, the Japanese business daily, the new “National Defense Program Guideline,” the first to be issued since 2004, will call for a “dynamic defense capability” directed at countering China in the East China Sea. It will include proposals for expanding the country’s submarine fleet and increasing its number of warplanes.

Formally Japan’s post-World War II constitution forswears the maintenance of a military, but Tokyo has over the past five years introduced a series of constitutional and administrative changes paving the way for the military buildup of its Self-Defense Forces.

The latest South Korean and Japanese exercises come on the heels of a US-South Korean deployment in the Yellow Sea in which the US carrier battle group also participated.

Meanwhile, Admiral Mike Mullen, the chairman of the US Joint Chiefs of Staff, traveled on Monday to South Korea in another show of military support for the US ally.

Beijing has condemned the military exercises. A statement issued by the Chinese Foreign Ministry last week warned, “Brandishing force cannot solve the issue. Some are playing with knives and guns, while China is criticized for calling for dialogue. Is that fair?”

The Chinese government has called for an emergency meeting of the principals in the Six-Party Talks aimed at the denuclearization of the Korean peninsula—the two Koreas, China, Japan, Russia and the US. The governments of South Korea, Japan and the US have all rejected the proposal, insisting that the talks cannot be resurrected without prior concessions from North Korea.

Instead, the Obama administration convened a meeting in Washington Monday between Secretary of State Hillary Clinton and her South Korean and Japanese counterparts to condemn “provocative attacks from North Korea.”

“We are committed to our partners and we are committed to the preservation of peace and stability in Northeast Asia and on the Korean peninsula,” Clinton said.

Coming in the wake of the three countries’ rejection of the call for the emergency talks between the six-party participants in Beijing, the gathering had the appearance of anti-China bloc.

It was accompanied by sharp anti-Beijing rhetoric from US foreign policy officials.

“The Chinese embrace of North Korea in the last eight months has served to convince North Korea that China has its back and has encouraged it to behave with impunity,” a senior administration official told the Washington Post. “We think the Chinese have been enabling North Korea.”

The Post reported, “The accusations mark a further deterioration of the tone and direction of the U.S. relationship with Asia’s emerging giant.” The paper added that the Obama administration’s “position now that China is in effect partially to blame for the problems is new.”

For its part, China’s People’s Daily pointed to the deteriorating relations between Washington and Beijing with an opinion column published Monday entitled “How should China handle America’s ‘return to Asia’?”

Beginning with a reference to the recent appearance of the US aircraft carrier battle group in the Yellow Sea, the column pointed to Washington’s attempt to “implement various sanctions, restrictions and inhibitions on China,” to its demands for currency revaluations and its intervention in the territorial disputes between China and its neighbors in the Diaoyu Islands and the South China Sea.

The growth of China to the status of the world’s second largest economy, the column indicates, is “instinctively seen by the United States as a direct or indirect challenge to its hegemonic status.”

While concluding that China should adhere to a policy of “peaceful development and international cooperation”, the column adds, “However, China’s foreign policy will of course advance with the times, namely that China will adjust the policy at the proper time according to its own will.”

Underscoring the sharp economic and political contradictions underlying the mounting tensions, People’s Daily also reported Tuesday that a new “Sino-Korean industrial park” is being created in Chongqing with an initial investment of $950 million. The deal was reached at a meeting Monday that included delegations from the Chinese and South Korean governments as well as representatives from large Korean conglomerates, including Samsung, Hyundai, LG, SK and Pohang Iron and Steel.

The industrial park, the report said, would provide Korean capital with “a positive platform to enter the interior regions of China and to further enhance the Sino-Korean economic and trade ties.”