Foreign Minister Li Zhaoxing said Beijing sought better ties with both Washington and Tokyo - China's two major trading partners - but he refused to back down from territorial disputes that have recently become increasingly bitter.

``Any part of putting Taiwan directly or indirectly into the scope of Japan-US security cooperation constitutes an encroachment on China's sovereignty and interference in China's internal affairs,'' Li said. ``The Chinese government and people are firmly against such activities.''

During a wide-ranging press conference on the sidelines of the National People's Congress, Li characterized the military pact between Japan and the United States as a ``bilateral arrangement'' that came about during the Cold War.

Such a relationship, he warned, should be ``strictly restricted'' to a bilateral nature, adding that any expansion of the alliance could cause problems in the region.

``If it goes beyond the bilateral scope, definitely it would arouse uneasiness on the part of Asian countries and bring about complicated factors to the regional security situation,'' Li said.

Beijing has been increasingly wary of Washington and Tokyo's close strategic partnership, seeing it as a potential threat to its firm goal of eventually reunifying Taiwan, by force if necessary.

The Taiwan issue was the ``most sensitive'' and core issue facing Sino-US ties, he said.

China last month voiced strong opposition to a US and Japanese statement which described Taiwan as a common security issue, slamming the allies' move as ``inappropriate.''

Washington and Tokyo jointly urged China, which has 600 missiles amassed opposite the island, ``to improve transparency of its military affairs.''

In Taiwan, meanwhile, tens of thousands rallied Sunday to protest against China's bid to enact a law aimed at preventing the island declaring formal independence.

The crowds, organized by the radical Taiwan Solidarity Union (TSU), held banners and chanted slogans while marching on the southern city of Kaohsiung, a stronghold of the island's pro-independence movement.

``Opposing annexation, safeguarding Taiwan,'' the demonstrators shouted.

TSU threatened to enact an ``anti-annexation'' law if China ignored demands to drop its planned ``anti-secession'' law.

In Taipei, a gathering by the ruling Democratic Progressive Party (DPP) drew at least 1,000 protesters.

``Taiwan is an independent sovereign state. Taiwan and China are two separate countries,'' DPP secretary-general Lee Yi-yang told the crowds at a high school.

``Now China wants to apply its domestic anti-annexation law to another country. This was unheard of before,'' Lee said. ``In the face of China, we people in Taiwan have only one option. That is, we must stand united and throw our weight behind President Chen Shui-bian.''

Taiwan Premier Frank Hsieh over the weekend urged Beijing to consider strong objections to the law from ``all Taiwanese people, political parties and private sectors.''

``If China misjudges the situation in Taiwan, its gap with the Taiwan people will further widen,'' he told reporters.

In Beijing, Li said present ties with Tokyo should be ``cherished'' as they have come through ``long-term and arduous efforts,'' but Tokyo must ``properly'' handle its relations with Taiwan and back down from its claims to the disputed Senkaku, or Diaoyu Islands, in the East China Sea.

The long-standing territorial dispute has recently been at the center of noisy anti-Japanese protests in China, as well as in Hong Kong, but Li said China hoped to resolve the dispute through dialogue. ``China has indisputable, historical and legal sovereignty over the Diaoyu Island and the adjacent islands,'' Li said.

``No glib words or tricky action can change this fact nor can it be changed by any unilateral action by any foreign country,'' he said in apparent reference to the recent building of structures by Japan on the islands.

Japan decided last month to place under state control and protection a lighthouse built by Japanese nationalists on the tiny islands, which lie between Taiwan and the southern end of Japan's Okinawan chain.

Oil deposits are confirmed to exist in the area around the islands, which are also claimed by Taiwan. AGENCE FRANCE-PRESSE