Japan and China have agreed to continue dialogue to settle long-festering feud over the ownership of Diaoyu Islands as there is no magic bullet in foreign diplomacy.

Addressing a news conference in Tokyo, Japanese Chief Cabinet Secretary Osamu Fujimura said, "There is no magic bullet in foreign diplomacy. We need to hold talks through various channels taking into account of broad perspective."

Fujimura's comments surfaced after Chinese Foreign Minister Yang Jiechi reiterated China's claim on Diaoyu Islands during his meeting with his Japanese counterpart Koichiro Gemba in New York.

Earlier this month, relations between Japan and China deteriorated sharply after Japanese government acquired the isolated East China Sea islands, known as Diaoyu in China and Senkaku in Japan, from their private owner. The announcement of the purchase triggered anti-Japan protests throughout China.

The islands in question are believed to be very rich in natural gas deposits.

China's bitter memories of Japan's military belligerence in the 1930s and 1940s as well as the existing contention between the two countries over regional resources have been preventing China to retreat; while in Japan Prime Minister Yoshihiko Noda is reluctant to be cowed down as his ruling party is facing a thrashing in upcoming elections.