BEIJING - Seeking to calm escalating tensions in the South China Sea, top generals from China and the U.S. spoke by phone and said they were ready to work out an effective mechanism to prevent confrontation and maintain stability in the region.

Chinese Chief of the General Staff Fang Fenghui told Chairman of the U.S. Joint Chiefs of Staff Joseph Dunford in a video conference Thursday that China values freedom of navigation "more than any other country in the world," according to a statement posted on the Defence Ministry's website.

While denying that Beijing was responsible for current tensions, Fang said China wanted to expand communication and co-operation with the U.S. to prevent the issue impacting on the overall relationship.

"The common ground and prospects for co-operation between China and the U.S. far exceed our disagreements and contradictions," Fang was quoted as saying. China wants to take the big picture of China-U.S. relations as the basis for approaching the South China Sea issue, Fang said.

The conversation followed a sharp verbal exchange following a U.S. destroyer's sail-by past China's largest man-made island in a move to exercise freedom of navigation.

China said it deployed two navy fighter jets, one early warning aircraft and three ships to track and warn off the USS William P. Lawrence during as it sailed Wednesday within 12 nautical miles (22 kilometres) of Fiery Cross Reef, the limit of what international law regards as an island's territorial sea.

The reef - which used to be submerged at high tide for all but two rocks - is now an artificial island with a long airstrip, harbour and burgeoning above-ground infrastructure. It dwarfs all other features in the disputed area, was recently visited by China's military No. 2 and became prominent in the Chinese media when a famous singer of patriotic anthems entertained troops there.

China said such "provocative actions" justified it in boosting "all categories of military capacity building" on its island strongholds in the South China Sea.

In Washington, State Department Spokesman Josh Earnest said on Thursday that such "innocent passage" cruises were routine missions intended merely to reinforce the Navy's determination to "fly, operate, and sail anywhere that international law allows."

"And we certainly do not want to see the tensions increase, because of the risk that that could pose to the extensive commerce that's conducted in that region of the world," Earnest said.

China has sought to bolster its claim to almost the entire South China Sea by constructing new islands such as Fiery Cross Reef atop coral outcroppings, adding to them airstrips, harbours and military infrastructure. The U.S. refuses to recognize the new features as enjoying the legal rights of naturally occurring islands, and while it takes no formal position on sovereignty claims, insists that all nations enjoy the right to freely sail and fly through the strategically vital area.