Visiting U.S. Defense Secretary Leon Panetta said here on Monday that the U.S. won't take sides over Diaoyu Islands and wants a peaceful resolution between China and Japan.

United States Defense Secretary Leon Panetta [File photo]

Penetta made the remarks during talks with Japanese government officials in Tokyo.

Japanese Foreign Minister Koichiro Gemba and Panetta agreed that Japan and the United States must cooperate in preventing Japan-China relations from being seriously damaged, Gemba told reporters after the talks.

"The important thing in relations between Japan and China is to avoid misunderstanding and misjudgment," Gemba said, noting the need for stronger communication and not to further escalate the situation.

Panetta also discussed with Japanese Defense Minister Satoshi Morimoto the deployment of the Osprey aircraft at a Marine base in Okinawa, a plan that has provoked strong local opposition.

Panetta's two-day visit from Sunday, made en route to China and New Zealand, comes as Japan and China are locked in a dispute over islands in the East China Sea, with tensions reaching a new high after Japan last week purchased three of the islands from their Japanese owner, local media reported.