Vietnam has fortified several islands it controls in the South China Sea with mobile rocket launchers able to strike Chinese military bases in the region, one of the most assertive moves in decades.

Diplomats and military officers told Reuters Hanoi had shipped the launchers from the Vietnamese mainland into positions on five bases in the Spratly islands in recent months. They said the launchers could be made operational, if needed, with rocket artillery rounds within two or three days.

The Guardian was unable to verify the report, which cited unnamed western officials, and Vietnam’s foreign ministry said the information was inaccurate.

Yet the report entrenches fears of militarisation and potential conflicts in the South China Sea, the most contentious issue in east Asia.

Malaysia, Brunei, Vietnam, the Philippines, Taiwan and Japan have overlapping claims with China to islands in the South China Sea and East China Sea. The region is thought to have significant oil and gas reserves and is a route for roughly £3.17tn in trade.

The launchers are believed to be part of Vietnam’s “Extra” rocket artillery system recently acquired from Israel. They have a range of 150km (93 miles) and carry 150kg warheads that can attack multiple targets at once.

Last month, Beijing reacted angrily to an international legal case that it lost to the Philippines over contested reefs and atolls, increasing global diplomatic pressure on China to scale back military expansion in the area.

But Beijing instead appears to have continued building bases on islands it has reclaimed, and satellite images released on Wednesday show China has placed reinforced aircraft hangars on islands it controls.

The Washington-based Center for Strategic and International Studies (CSIS) published recent satellite photographs showing the construction of the hangars on three reclaimed islands where Beijing has built military bases.

China landed a military transport plane in the South China Sea last month but the runways it completed this year have not yet been used to land military jets.

CSIS said the new buildings on each of the islets, Fiery Cross, Subi and Mischief Reefs, “will soon have hangar space for 24 fighter-jets plus three to four larger planes” and “can easily accommodate any fighter-jet in [China’s] People’s Liberation Army Air Force”.

That includes fighters such as the J-11 and Su-30 as well as larger bombers such as the H-6. The biggest hangars can accommodate the 46.6-metre-long KJ-2000 surveillance aircraft.

China’s president, Xi Jingping, said last year that he did not intend to militarise the South China Sea but the images suggest otherwise, with CSIS saying the hangars are reinforced to withstand military strikes.

In February, China deployed surface-to-air missile launchers on Woody Island, dramatically upping the stakes in the South China Sea. Tensions have also deepened this month over South Korea’s decision to host an advanced US-made anti-missile defence unit, a move that angered China.

South Korea and the U have said the radar system, called a terminal high altitude area defence (Thaad) unit, would only be used in defence against North Korean ballistic missiles.

But the placement of the Thaad, made by Lockheed Martin, is seen by China as move to monitor its missile deployment in the region. The Chinese foreign minister, Wang Yi, said the Thaad plan was an “out-and-out strategic” move.

Carl Thayer, an analyst on the South China Sea at the Australian Defence Force Academy, told the Guardian the Thaad deployment, China’s construction of military hangars and Vietnamese rocket launcher deployments had created emerging crisis spots in east Asia.

“Each of these hot spots represents an action-reaction cycle that has the potential to escalate,” he wrote in an email. “At a time of increasing tensions, accidents and miscalculations that likely hold of a clash between military ships and planes increases.”