Beijing came under pressure at the ASEAN Summit over its "illegal" island-building in the South China Sea, after the Philippines produced photos it said showed fresh construction activity at a flashpoint shoal.
Any artificial island at Scarborough Shoal could be a game-changer in China's quest to control the South China Sea and raises the risk of armed confrontation with the United States, security analysts say.
Beijing insists it has not started building at the shoal -- a move that could lead to a military outpost just 230 kilometres (140 miles) from the main Philippine island, where US forces are stationed.
But the Philippines released images which it said showed Chinese ships in the area that were capable of dredging sand and other activities required to build an artificial island.
A US administration official questioned the Philippine's claim, telling AFP the United States had not detected any unusual activity at Scarborough Shoal.
"Chinese Naval and Coast Guard presence in the vicinity of Scarborough Reef was within the levels we've observed there over the past several months," the official said.
The photos were released during an annual summit of the 10-member Association of Southeast Asian Nations in Laos and the bloc voiced alarm.
"We remain seriously concerned over recent and ongoing developments and took note of the concerns expressed by some leaders on the land reclamations," said a joint statement at the end of their two-day summit.
China claims nearly all of the South China Sea, through which $5 trillion in trade passes annually, even waters approaching the coasts of the Philippines and other Southeast Asian nations.
The competing territorial claims have long been a major source of tension in the region, with China using deadly force twice to seize control of islands from Vietnam.
- Illegal island building -
Tensions have escalated sharply in recent years, as China built islands and airstrips on reefs and islets in the Spratlys archipelago -- another strategically important location -- that are capable of supporting military operations.
The United States has reacted to that build-up by sailing warships close to the new islands and sending warplanes over them, deeply angering China.
A UN-backed tribunal ruled in July that China's claims to most of the sea had no legal basis and that its construction of artificial islands in the disputed waters was illegal.
But Beijing vowed to ignore the ruling.
China took control of Scarborough Shoal in 2012 after a standoff with the Philippine Navy and has since deployed large fishing fleets while blocking Filipino fishermen.
Expanding that presence with a military outpost is vital to achieving China's ambitions of controlling the sea, according to security analysts.
US officials fear any Chinese military airfield at the shoal would enable Beijing to enforce a threatened air defence identification zone in the sea.
An outpost at the shoal would also put Chinese fighter jets and missiles within easy striking distance of US forces stationed in the Philippines.
US President Barack Obama reportedly directly warned his Chinese counterpart Xi Jinping during a meeting in March not to push ahead with any island-building there.
- Conflict risk -
The United States, which is a treaty ally of the Philippines, has repeatedly said, it does not want to fight a war over the shoal.
But military skirmishes cannot be ruled out if China does start to build an island, according to security analysts.
"We could witness a physical confrontation between Chinese Coast Guard and Filipino vessels backed up by the US Navy," Carl Thayer, an emeritus professor at Australia's University of New South Wales, told AFP.
Philippine President Rodrigo Duterte had said, he did not want to anger China by highlighting the row at the ASEAN events.
Chinese Premier Li Keqiang, Obama and leaders from other regional powers are also in Laos this week for separate meetings with ASEAN.
But the release of the photos came just a few hours before ASEAN leaders met Li, in what Duterte's spokesman said was a deliberate move.
The ASEAN statement warned that further land reclamation could escalate tensions and called for respect for United Nations' maritime laws.
Yet the statement did not explicitly call on China to abide by the July ruling, reflecting divisions in ASEAN.
Cambodian Prime Minister Hun Sen has repeatedly said, he does not want to pressure China, his most important ally, over the issue.
Obama had planned to discuss the sea issue during a meeting with Duterte on the sidelines of ASEAN.
But he cancelled after the volatile Philippine president called him a "son of a whore" for expressing concern about Duterte's war on crime which has claimed 3,000 lives.
Manila's Foreign Secretary Perfecto Yasay said, the two leaders had a brief, impromptu meeting as delegates gathered for a gala dinner on Wednesday.
The White House described the meeting as a "brief discussion" that "consisted of pleasantries between the two."