BEIJING -- Japan and China considered yesterday whether their leaders should meet this weekend to try to defuse the worst dispute in decades between the Asian powers but traded more angry words over anti-Japanese protests and Tokyo's wartime history.
China said Japan proposed that its prime minister, Junichiro Koizumi, meet one-on-one with President Hu Jintao during a conference of Asian and African leaders in Indonesia.
''We are still considering it," said Vice Foreign Minister Wu Dawei of China.
Suggesting that plenty of work lay ahead before either leader might commit, Koizumi warned in Tokyo that ''if it's going to be the exchange of harsh words, it's better not to meet."
The heated rhetoric and sometimes violent protests aimed at Japanese interests in China have raised worries about the potential effect on the economic relationship between Asia's two biggest economies, which are linked by billions of dollars in trade and investment.
Yesterday, the main Tokyo stock index fell 3.8 percent -- its worst one-day drop in 11 months. Analysts blamed the fall on the dispute and the recent slide on Wall Street. Japanese companies with business links to China and the United States were hit especially hard.
China's government yesterday continued to blame Japan for the diplomatic spat, accusing the Japanese of failing to face up to their militaristic past. ''It shouldn't be us who should apologize," Wu said at a news conference. ''It is Japan who should apologize."
Japan countered that Beijing had not shown remorse for Chinese rioters stoning the Japanese Embassy and a consulate. The demonstrators were protesting Tokyo's campaign for a permanent UN Security Council seat and its approval of schoolbooks that critics say minimize Japanese wartime atrocities.
''No matter what the reasons are, violence is not acceptable," Japan's chief Cabinet secretary, Hiroyuki Hosoda, said in Tokyo. ''We find it extremely regrettable" that there was no apology.
In New York, UN Secretary General Kofi Annan encouraged Hu and Koizumi to sit down together to settle the fight.
''They have lots of relationship on all fronts -- political, economic, and social -- and I hope those important aspects of their relationship will encourage them to resolve their differences," Annan said.
The rancor is fueled by Chinese anger at what many people consider Japan's failure to atone for its conquest of Asia and by the modern rivalry for energy resources and regional dominance.
That anger erupted into street protests after Japan approved new history textbooks that condense or omit references in earlier volumes to the Japanese military's germ warfare and sex slavery of Asian women. They only briefly mention the Nanjing Massacre of 1937, when Japanese soldiers killed tens of thousands of Chinese civilians.
Elsewhere in Asia, other nations joined China in calling on Japan to own up to its violent past.
''We feel as Indonesians that all countries, including Japan, have to face the facts of history," said Foreign Ministry spokesman Marty Natalegawa.
Vietnam, which bars most demonstrations, allowed a small weekend protest outside the Japanese Embassy in Hanoi.
China's leaders also are alarmed at proposals to give Japan a permanent seat on an expanded Security Council. China, the only Asian member of the council, is reluctant to have its influence diluted.
Yesterday, the new US ambassador to Tokyo, J. Thomas Schieffer, endorsed Japan's Security Council ambitions. ''We believe that Japan speaking with a louder voice in the world will actually increase the chances for peace and security," Schieffer said.
In addition, China has objected to Japan's policies on Taiwan. It is particularly concerned about an expanded strategic understanding between the United States and Japan, reached in February, that declared that a peaceful resolution of the Taiwan issue is a ''strategic objective" shared by Tokyo and Washington.
Hatushisa Takashima, a Japanese Foreign Ministry spokesman, noted that the US-Japanese accord expressed hope that the Taiwan standoff can be solved without war. But the inclusion of that hope in a list of US-Japanese strategic objectives was interpreted here as a sign that Japan might help the United States defend Taiwan if there is war.
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