Joint military exercises between the US and the Philippines are getting under way in the South China Sea, even as Manila remained locked in a stand-off with Beijing over a disputed shoal.
This year they are taking place off Palawan, near parts of the South China Sea both Manila and Beijing claim.
Meanwhile Philippine and Chinese vessels remain at the Scarborough Shoal, a week after the deadlock began.
The Philippines said its warship found eight Chinese fishing vessels at the shoal - which both sides claim - when it was patrolling the area on 8 April.
When navy personnel boarded the Chinese fishing vessels on Tuesday they found a large amount of illegally-caught fish and coral, it said.
Two Chinese surveillance ships then arrived in the area, preventing the navy from making arrests.
China insists that its rights in areas like the disputed Spratly Islands are paramount, despite rival claims from the Philippines, Vietnam and other countries too.
The government in Manila is taking steps to modernise its small naval and air forces. But it is looking to Washington to help balance China's growing power.
Two decades after US forces were evicted from their biggest base in the Pacific, there has been talk of a renewed US military presence. The fact that the joint exercises are being held on the island of Palawan - the closest Philippines territory to the Spratlys - will doubtless irritate China.
But the Philippines government must walk a tightrope here - China is its third largest trading partner. It wants to defend its corner but doesn't want to provoke a crisis with Beijing.
Attempts to resolve the stand-off do not as yet appear to have been successful.
"The stalemate remains. Both sides are in touch with each other," Philippine foreign ministry spokesman Raul Hernandez said in a statement on Sunday.
'New context'
The joint exercises are taking place in a different area, to the southwest of the shoal. Some 7,000 troops will be taking part.
A Philippine military spokesman said that the exercises were unrelated to events at Scarborough Shoal.
The focus of the exercises would be on "improving security, counter-terrorism and humanitarian and disaster response", Major Emmanuel Garcia said.
At the opening ceremony, the Philippines' armed forces chief Jessie Dellosa hailed the joint exercise as ''timely and mutually beneficial''.
"The conduct of this annual event reflects the aspirations to further relations with our strategic ally, a commitment that has to be nurtured especially in the context of the evolving challenges in the region,'' he said.
The exercises take place every year but, reports the BBC's diplomatic correspondent Jonathan Marcus, this year they are different because the context within which they are taking place has changed.
China's maritime power is growing and the Philippines - along with many other small countries in the region - is worried.
It wants to bolster its own defences and underline its growing ties with Washington, our correspondent says, and the US sees these exercises as an opportunity to demonstrate its renewed interest in Pacific security.
Six countries claim competing sovereignty over areas in the South China Sea, which is believed to contain huge deposits of oil and gas.
Along with China and the Philippines, they are Brunei, Malaysia, Vietnam and Taiwan.
China's claim includes almost the entire South China Sea, well into what the UN Convention on the Law of the Sea recognises as the 200-mile-from-shore Exclusive Economic Zones of other claimants.
That has led to occasional flare-ups and to competition to occupy islands, reefs and sandbars.
Filipino students attack US embassy to protest war games near South China Sea
By Associated PressLeft-wing protesters in the Philippines have splattered paint on the seal of the US Embassy to demand a pullout of American troops taking part in annual war games.
About 70 student activists took police and embassy guards by surprise early Monday when they threw blue-and-red paint at the seaside mission's main gate and scrawled 'US troops out now.'
They also chipped away letters from the bronze signage and burned a mock American flag.
outrage: Students attacked the US Embassy sign in Manila to protest war games the Filipino military is conducting with American forces
US and Philippine military officials say nearly 7,000 American and Filipino troops have begun two weeks of major military exercises but they stress that China is not an imaginary target.
Philippine army Maj Emmanuel Garcia said Monday that the annual drills, called Balikatan or shoulder-to-shoulder, will include combat maneuvers involving the mock retaking by US-backed Filipino troops of an oil rig supposedly seized by terrorists near the South China Sea.
US Marine Lt Col Curtis Hill says most other events will focus on humanitarian missions and disaster-response drills.
Beijing has protested military drills involving Americans near the South China Sea, where it is locked with the Philippines and four other nations in territorial rifts.
Flag burning: About 100 students turned out to the protest and called for an end to the military relationship between the US and the Philippines
Problems began on Sunday when Manila dispatched its largest warship, a US Hamilton-class cutter, to Scarborough Shoal, a group of rocky outcrops off the main Philippine island of Luzon, after it spotted eight Chinese fishing boats anchored in the area.
The shoal, which is crossed by major shipping lanes, is believed to be rich in oil and gas reserves as well as fish stocks and other comercially-attractive marine life.
On Friday, Philippine officials confirmed that three Chinese fishing boats had left the area, but said five other Chinese boats remained. It was unclear whether they carried illegal catches, they added.
Damage: A student helps deface the seal outside the U.S. embassy building
'We are watching five fishing vessels that are still collecting coral in that area,' Lieutenant General Anthony Alcantara, chief of the army's northern Luzon command, told reporters on Friday.
Asked if the three fishing vessels which left had carried illegal catches, he said: 'I have no data on that.'
China also withdrew one of its three naval ships from the area on Friday, a day after a Philippine warship pulled out to be replaced by a coast guard vessel. Manila's move had been interpreted as a sign that tensions were easing as diplomats rushed to find a solution to the dispute.
But on Friday the Philippine navy sent a ship into the area to back up a coast guard cutter tasked to enforce the country's maritime laws, suggesting tensions were still high.
'The mandate is to support our coast guard there,' Alcantara said.
'Our mandate is to take care of our own people there and sovereignty.'
US won't take sides in South China Sea dispute
Updated: 2012-05-02 12:24
The United States said on Monday that it would not take sides in the Huangyan Island standoff between China and the Philippines in the South China Sea and reiterated support for a diplomatic resolution to the territorial dispute.Washington does not take sides on competing sovereignty claims there, but has a national interest in maintaining freedom of navigation as well as peace and stability, US Secretary of State Hillary Clinton said, after meeting top diplomatic and defense officials from the Philippines.
Philippine Foreign Secretary Alberto del Rosario and Defense Secretary Voltaire Gazmin attended the 2+2 dialogue with their US counterparts, Clinton and Leon Panetta, in Washington.
"The United States supports a collaborative diplomatic process by all those involved for resolving the various disputes that they encounter," Clinton said. "We oppose the threat or use of force by any party to advance its claims."
Gazmin alluded to tension with China over islands in the South China Sea as he called for the need to "intensify our mutual trust to uphold maritime security and the freedom of navigation".
"We should be able to work together to build a minimum, credible defense posture for the Philippines, especially in upholding maritime security," Gazmin said.
The Philippines and China have been embroiled in the Huangyan Island dispute, with both nations stationing vessels there for nearly three weeks to assert their sovereignty.
China on Monday highlighted remarks made by the Philippine president about de-escalating the tension over the island, urging the Philippines to "match its words with deeds" and return to the proper pathway of diplomatic solutions.
Speaking of the tension, Philippine President Benigno Simeon Cojuangco Aquino III said he had issued instructions to his military, telling them not to intensify the issue.
Chinese Foreign Ministry spokesman Liu Weimin stressed that there is no change in China's stance of using diplomatic channels to peacefully resolve the issue, which was triggered when a Philippine warship harassed Chinese fishermen and raised concerns over China's sovereignty of the island.
The Philippine officials also stressed diplomacy when asked what aid they had requested from Washington, saying that Manila sought to bring the South China Sea issue to international legal bodies.
Clinton reaffirmed the US commitment to the 60-year-old Mutual Defense Treaty with the Philippines, calling the Philippines a country "at the heart" of the new US strategy toward the Asia-Pacific.
Washington would help improve the Philippines' "maritime presence and capabilities" with the transfer of a second high-endurance (coast guard) cutter this year, Panetta said.
The US emphasis on neutrality and a diplomatic resolution would encourage Manila to be more restrained on the Huangyan Island issue, said Fan Jishe, a US studies expert at the Chinese Academy of Social Sciences.
"Washington doesn't want territorial disputes between its Asian allies and China to be obstacles to China-US relations," he said.
Xinhua and Reuters contributed to this story.
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