It does not signal any attempt to contain China ... I don't believe China can be contained

William Cohen

"It is a basic principle of relations between countries to honour an agreement reached between states," he said.

Mr Cohen went on to stress that the US was seeking to dispel any Chinese beliefs that it was seeking to isolate China in a manner similar to its treatment of the Soviet Union during the Cold War.

He also accused the Chinese media of portraying a distorted view of US intentions.

"The characterisation of the United States as a country determined to dominate the world and China, is simply untrue," he said.

US pressure

The Israeli decision to stop the deal was announced on Wednesday at the Middle East peace summit being held at Camp David outside Washington.

The US Government had complained strongly about the proposed sale, and the move was seen as evidence of Israel bowing to US pressure in order to strengthen its negotiating position on other issues.

US defence planners had warned that the advanced Phalcon Awacs system could be used to track American jets in the region if hostilities broke out between China and Taiwan.

American Congressional leaders had threatened to cut $2.8bn in annual aid to Israel if the deal went through.

Mr Cohen is on a four-day bridge-building trip to Beijing, designed to repair military relations between the two countries following the bombing of China's Belgrade embassy last year.

Although trade between China and US is booming, the recent relationship between the two countries has blown hot and cold, particularly over regional strategic issues.