BEIJING - Chinese Premier Wen Jiabao threatened action against Japan if it does not immediately release a detained ship captain, in his first comments in a growing fight over disputed islands.

Wen's remarks Tuesday night in New York were the first by a top Chinese leader on the issue that has led Beijing to suspend ministerial-level contacts with Tokyo. China also has said Wen will not meet with Japanese Prime Minister Naoto Kan during U.N. meetings in New York this week.

Wen laid the blame for the dispute entirely at Japan's door.

Tokyo "bears full responsibility for the situation, and it will bear all consequences," he told a gathering of overseas Chinese, according to China's Foreign Ministry website. The report did not elaborate on what actions China might take.

China-Japan relations are at their worst in several years after Japan arrested the Chinese captain of a fishing boat that collided two weeks ago with Japanese coast guard vessels near islands in the East China Sea claimed by both nations. Japan extended his detention Sunday, and China responded by suspending contacts.

The dispute over the islands, known as Senkaku by Japan and Diaoyu or Diaoyutai in Chinese, comes as an increasingly confident China - its economy booming and military expanding - asserts its presence in the region.

David Fuller's view This is the latest development in what is really a dispute over territorial rights to oil and gas reserves in Asia's crowded territorial waters. China has also banned rare earths exports to Japan.

Competition for commodities and energy sources in particular is increasing, as long forecast by Fullermoney. Watch for the USA and other industrial powers to speed up their development of rare earths minerals and processing facilities.