“A misjudgement on one side or the other could result in violence, and could result in conflict,” Leon Panetta said at the start of an Asian tour.
His comments came as anti-Japanese protests continue to sweep China over a disputed island chain.
Demonstrators gathered in cities across China for a second day on Sunday.
Riot police used tear gas and water cannon in the southern city of Shenzhen to break up an angry crowd.
China is reasserting its claim to sovereignty over the disputed Senkaku or Diaoyu islands in the East China Sea, in the wake of a Japanese government decision last week to purchase the islands from their private Japanese owners.
Japanese Prime Minister Yoshihiko Noda has urged Beijing to take steps to protect Japanese nationals, but added that the authorities in both countries should “remain calm”.
Speaking in Tokyo, Leon Panetta said: “I am concerned that when these countries engage in provocations of one kind or another over these various islands, that it raises the possibility that a misjudgement on one side or the other could result in violence, and could result in conflict.”
“And that conflict would then have the potential of expanding,” he warned.
The US defence chief stressed that during his talks in Tokyo and later in Beijing he would appeal for restraint.
Leon Panetta also said that Washington did not take a position with regard to the territorial disputes in Asia.
He will also visit New Zealand as part of his tour.
On Sunday, hundreds of Chinese protesters again faced off against riot police at the Japanese embassy in Beijing.
In Shenzhen, police fired tear gas to disperse a demonstration, while in the nearby city of Guanghzhou angry crowds burned Japanese flags.
One eyewitness in the city of Xi’an described how his camera was snatched from him and damaged because it was a Japanese brand.
“Japanese-made cars were randomly stopped, their drivers grabbed and thrown out… and the cars smashed and burned. The police and army seemed to do little to stop the riot,” he said.
Tensions have been heightened this week after the purchase of some of the islands by the Japanese government from their private Japanese owners.
China briefly sent six surveillance ships into waters around the islands on Friday in response.
The islands are also claimed by Taiwan and have been a long-running source of friction in the region.
Analysts see Japan’s decision to buy the islands as damage limitation in response to a much more provocative plan by the nationalistic governor of Tokyo, who wanted to purchase and develop the islands.
And yet there is virtually no mention of the protests in China’s state media, and attempts have been made to control discussion on the internet.
This reflects the Communist leadership’s ambivalence about such displays of nationalist fury: they can be useful to send a message to Japan, but could easily get out of control and spark wider expressions of discontent.
There is plenty of scope for miscalculation in the coming days: Chinese fishing fleets are set to return to the disputed waters, and nationalists could try to provoke Japan by landing on the islands.
In Japan, the government seems unlikely to back down with election looming.
There is talk in the Japanese press that some on both sides could be willing to risk a limited naval clash in defence of the conflicting claims.
Further complicating matters, Japan’s newly appointed ambassador to China, 60-year-old Shinichi Nishimiya, died on Sunday, the foreign ministry said.
The envoy – who had been due to take his post in October – collapsed several days earlier near his Tokyo home and was taken to hospital.
The foreign ministry has not publicly commented on what caused his death.
kgqUyhG0ZfkThe US House Ethics Committee has voted to release its report on former Republican Representative…
ABC News has agreed to pay $15 million to President-elect Donald Trump to settle a…
South Korea’s parliament has voted to impeach President Yoon Suk Yeol over his failed attempt…
Israeli war planes have carried out more than 100 air strikes in Syria on December…
President-elect Donald Trump has threatened to impose 100% tariffs on the BRICS countries if they…
Syrian troops have withdrawn from the city of Aleppo following an offensive by rebels opposed…