South Korea on Friday urged Japan to recant its "unjust" claim to Dokdo after Prime Minister Yoshihiko Noda pledged an "indomitable resolve to protect" its sovereignty over the tiny islets in the East Sea.
"We strongly protest Prime Minister Noda's reiteration of an unjust claim over Dokdo that is clearly our territory historically, geographically and under international law. We urge an immediate withdrawal," Seoul's Foreign Ministry spokesperson Cho Tai-young told a press conference.
He called on Japan to join Korea in forging a "future-oriented relationship based on proper historical perception."
In a news conference, Noda hardened his rhetoric pledging "to do what should be done to protect our national interests."
He repeatedly claimed that South Korea is"illegally occupying" the islets.
Earlier in the day Japan's lower house adopted a resolution calling for an end to Seoul's "illegal occupation." The lawmakers criticised President Lee Myung-bak's trip to Dokdo on Aug. 10 and his demand for Emperor Akihito's apology for Japan's colonial atrocities.
During the House session, Noda also branded Lee's visit an "illegal landing."
The Korean Foreign Ministry sharply criticised the parliamentary move. A senior presidential official said Cheong Wa Dae would "not respond to Japan's every move."
The resolution marked Tokyo's first parliamentary action involving the islets in 59 years. Its upper chamber is expected to endorse a similar motion early next week.
In another retaliatory step, Tokyo has also decided to postpone its plan to purchase Korean government bonds worth hundreds of millions of dollars for an unidentified period due to a "lack of public understanding," Yomiuri Shimbun newspaper reported.
The archipelago country is also considering rolling back an envisioned $70 billion currency swap deal with Seoul.
Concerns have been rising that the flare-up may spill over to derail bilateral economic cooperation and cultural exchanges.
Japanese Finance Minister Jun Azumi called off his planned travel to Seoul on Saturday to discuss the issues. He said Friday nothing has been decided and he would "watch the situation for a while."
The measures came at the height of a row over the Korea-administered islets that have been a constant source of friction between the two Asian powers.
Earlier in the day, the ministry summoned Ohtsuki Kotaro, a counselor at the Japanese Embassy in Seoul, to deliver a written protest against and demand a retraction of similar "illegal" remarks by Japanese Foreign Minister Koichiro Gemba.
On Thursday, Seoul sent back Noda's letter expressing regret over Lee's trip to Dokdo by mail after the Japanese Foreign Ministry refused to open its gate for Korean diplomats for about an hour.
The ministry called in Shin Kak-soo, South Korean ambassador to Japan, on Friday to complain that the return of the letter was a diplomatic faux pas.
During the meeting, Gemba demanded Lee apologise and retract his remarks on the emperor.
In response, Shin expressed regret about the ministry's blockade and the lower house's resolution. He addressed Japan's "misunderstanding" about the president's intent, according to the Korean embassy in Tokyo.
As the diplomatic clash degenerates into emotional squabbling with no end in sight, a growing number of lawmakers and experts urge the two countries to cool down and look to the future.
Yasumasa Shigeno, secretary-general of the Social Democratic Party that voted against the resolution, called it "provocative" and said "there will be no good outcome even if we get excited and fight."
Korea and Japan should "sever the vicious circle of retaliation and re-retaliation and mull steps to normalize their relations," Kim Tae-woo, president of the Korea Institute for National Unification, wrote on the think tank's website on Thursday.