WASHINGTON: The U.S. says the world cannot afford a conflict sparked by the rumbling sovereignty disputes in the seas of East Asia.

Top U.S. diplomat for the region Kurt Campbell said Thursday that heightened nationalism and demonstrations were exacerbating the situation.

Conflicting claims over islands have sparked anti-Japan protests in China. Tensions have also run high in recent months in the South China Sea - a key conduit for global trade, where China has disputes with Southeast Asian neighbors.

Campbell told a Senate hearing the U.S. was urging multilateral diplomacy to manage and resolve the disputes.

He said: "''The world cannot afford a crisis in Asia that would have untold consequences for our economies, and the economies of Asia, Europe and the rest of the world."