UNITED NATIONS (AP) - The U.S. is urging China and Japan make serious diplomatic efforts to peacefully manage their bitter dispute over contested islands.

The two Asian powers traded angry accusations in a late-night exchange at the U.N. General Assembly Thursday over the islands, called Senkaku by Japan and Diaoyu by China.

Top U.S. diplomat for East Asia, Kurt Campbell, told a news conference Friday the U.S. will not play a mediating role in the dispute.

He said both sides recognize the importance of their relationship, and the U.S. strongly believes dialogue would yield positive results.

But Campbell said that it would be wise to set aside the territorial dispute as it would be "extraordinarily difficult" to solve it.

Japan administers the islands, and like China, is adamant they are its territory.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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