Hundreds of protesters gathered outside the Japanese embassy in Beijing Thursday to condemn Japan's move to nationalize a disputed island chain in the East China Sea.

The protesters called for Japan to leave the uninhabited islands — known as Senkaku in Japanese and Diaoyu in Chinese — and for a boycott of Japanese products.

Chinese authorities allowed the demonstrations to proceed, although police prevented protesters from getting close to the Japanese embassy compound.

Japan's Kyodo news agency reported anti-Japan protests also took place in Shanghai and Fuzhou, the capital of Fujian Province.

China's vice commerce minister, Jiang Zengwei, warned Thursday the dispute could affect trade between China and Japan, while Japanese Foreign Minister Koichiro Gemba called for calm.

China is Japan's largest trading partner.

On Monday, Japan announced a $26 million deal to nationalize the disputed island chain, whose waters contain rich fishing grounds and potential oil reserves. Japanese officials said the move was meant to ensure that no one triggers a confrontation with China by developing the uninhabited islands.

China called Japan's purchase a violation of Chinese sovereignty, saying China does not recognize any Japanese ownership of the islands. China urged Japan to revoke the purchase immediately.

Japan rejected China's demand, saying Tokyo will not reconsider a transaction involving what it considers to be sovereign Japanese territory.

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