Philippine officials proposed an arrangement to break the impasse at the Scarborough Shoal off the northwestern Philippines, where a Philippine warship tried to detain Chinese fishing boats but was stopped by two Chinese surveillance craft. The standoff entered a third day Thursday.
China, through its ambassador to Manila, Ma Keqing, was expected to respond to the proposal at the earliest on Thursday, when both sides were to resume talks, two Philippine officials said.
The officials, who were monitoring the talks, spoke on condition of anonymity because they were not authorized to discuss the negotiations with the media.
They did not give details of the proposal, but said it was a pragmatic way to solve the standoff. The Chinese fishermen were not expected to be able to stay at the uninhabitated shoal for a long time because they may run out of food and other provisions.
Philippine Foreign Secretary Albert Del Rosario said late Wednesday that he and Ma were working on a possible solution but declined to give details.
"We have an issue here that we're trying to address in a civilized and friendly way. I'm hopeful that our long-standing friendship will make us arrive at a diplomatic solution faster," he said.
While they worked toward a compromise, both China and the Philippines also flexed their muscles. Del Rosario said after the first round of talks Wednesday that he warned China's ambassador that "if the Philippines is challenged, we are prepared to secure our sovereignty."
The Chinese Embassy said the fishing boats had taken shelter from a storm in the lagoon and accused Philippine troops of harassment.
"Two Chinese marine surveillance ships are in this area fulfilling the duties of safeguarding Chinese maritime rights and interests," it said in a statement. It said the shoal "is an integral part of the Chinese territory and the waters around it the traditional fishing area for Chinese fishermen."
Philippine navy chief Vice Adm. Alexander Pama said a second Philippine ship was due to arrive Thursday morning at the shoal.
Philippine authorities also were trying to identify an aircraft that flew over the shoal Wednesday in what could be a surveillance mission, he said, adding that the situation nevertheless remained relatively calm.
Philippine President Benigno Aquino III said Wednesday that "nobody will benefit if violence breaks out" and instructed his diplomats to find a diplomatic solution to the most serious standoff in years in the waters where several nations have overlapping claims.
The South China Sea is home to myriad competing territorial claims, most notably the Spratly Islands south of the shoal, which are believed to be in rich in oil and gas. The region is also prime fishing ground and one of the world's busiest sea lanes.
The United States said it was concerned by the increased tensions in the South China Sea. "We urge all parties to exercise full restraint and seek a diplomatic resolution," a State Department spokesperson said on customary condition of anonymity.
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