U.S. Defense Secretary Leon Panetta on Wednesday urged China to tone down its stance on its territorial disputes with neighboring countries, saying Beijing should cooperate with the United States, Japan and other nations to ensure peace and prosperity in the Asia-Pacific region.

Noting it is in China's interest to ease tensions, Panetta said in a speech in Washington, "It cannot be a China that threatens other countries. It cannot be a China that threatens . . . to go after their territories and create territorial disputes."

The Pentagon chief was responding to a question on the heightened tensions over the Senkaku Islands, including the recent incident in which a Chinese warship locked its fire-control radar on a Maritime Self-Defense Force destroyer.

Panetta said the dispute concerns the United States because "the situation could ultimately get out of hand."

"One country or the other could react in a way that could create an even greater crisis," he said, adding that Washington is pressing both nations to "exercise good judgment" and resolve the issue peacefully.

Stressing that the United States, Japan and South Korea are doing everything required to promote security and prosperity in the region, Panetta said China "should be part of that, not against it."

"I sense in the new leadership in China that they recognize the importance of trying to develop that kind of communication," Panetta said.