Ships from Vietnam and China have been exchanging water cannon fire
The US has warned China that moving a drilling rig into seas disputed with Vietnam was "provocative".
In a telephone call, US Secretary of State John Kerry told Chinese Foreign Minister Wang Yi the US had "strong concerns" over recent developments.
Last week, Chinese and Vietnamese ships clashed over the drilling rig that China has placed in waters near the disputed Paracel Islands.
China and Manila are also at odds over overlapping territorial claims.
Beijing claims a U-shaped swathe of the South China Sea that covers areas other South East Asian nations say are their territory.
The issue has been rumbling in recent years amid an increasingly assertive stance from China over its claims.
Last week, several collisions were reported between Chinese and Vietnamese vessels in disputed waters as the Vietnamese ships sought to prevent the installation of the Chinese drilling rig.
Reports suggest the stand-off - involving dozens of ships - is continuing, with water cannon fire being exchanged.
On Sunday, anti-China protests took place in several Vietnamese cities. It is the most serious confrontation between the two nations for several years.
In Monday's telephone call, Mr Kerry "said China's introduction of an oil rig and numerous government vessels in waters disputed with Vietnam was provocative", US State Department spokeswoman Jen Psaki said.
"He urged both sides to de-escalate tensions, ensure safe conduct by their vessels at sea, and resolve the dispute through peaceful means in accordance with international law."
Separately, in comments made at a meeting with the Singaporean foreign minister, Mr Kerry called the Chinese move an "aggressive act".
Mr Wang, meanwhile, urged Mr Kerry to be objective on the issue, a Chinese foreign ministry spokeswoman said.
Tensions between Beijing and Manila are also running high, after the Philippines arrested and then charged nine Chinese fishermen with poaching at a disputed shoal.
The Philippines is in the process of taking China to a UN court over its territorial claims.
It has also recently signed a new security deal with the US which would allow an expanded US troop presence, in a move seen as linked to Manila's deteriorating ties with Beijing.
On Tuesday, Chinese state media slammed the Philippines, saying that if it continued to challenge China it would pay "an unaffordable price".
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Paracel Islands
- Called Xisha in Chinese, Hoang Sa in Vietnamese
- Claimed by China, Taiwan and Vietnam
- More than 30 islands and reefs, including two main groups: the Amphitrite group and the Crescent group
- Woody (Yongxing) Island, the largest island in the archipelago, now hosts the City of Sansha with a small community of fishermen, civil servants and soldiers
- Vietnam maintains 'historical claims' to the Paracels without physical presence there
- It controlled several islands within the Crescent group, where it had a weather station, until 1974, when after a brief but bloody clash China gained control over the entire archipelago
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