DAVOS, Switzerland (AP) — A top Chinese diplomat expressed hope Friday that Beijing's dispute with Japan over islands claimed by both countries can be "controlled" soon, and a leading Chinese academic predicted it could be settled within two years.

Ambassador Liu Zhenmin, China's envoy to the U.N. in Geneva, told a session on the sidelines of the World Economic Forum in Davos that his country hopes the new Japanese government will face up to history and reality "and take the right measures to overcome the difficulty in relations with China and bring relations back on the track of normal development."

Yan Xuetong, dean of the Institute of Modern International Relations at Tsinghua University, said he had "great confidence" the two governments could solve the problem themselves without outside help.

"I think that they can settle down this dispute within two years," Yan said.

Tensions between the two countries soared after the Japanese government purchased the uninhabited islands, known in Chinese as the Diaoyu and Japanese as the Senkaku, from their private Japanese owners in September. Liu said that move "seriously encroached upon China's sovereignty."

Liu wouldn't give a time frame for resolving the rival claims.

"I hope the dispute over Diaoyu will be controlled soon, but I don't know how long it will take," he said.

"There are many options for peaceful solution," Liu added. "There might be negotiated settlement for resolving differences, but also there are some other results possible."

Yan, who is also a consultant to China's Ministry of Commerce, said he thinks "shared interest will bring China and Japan to settle down their dispute because I think the value of these islands is not that much as the other interests of these countries."

Both sides have called for dialogue to avoid an armed confrontation, though Japan has rejected China's demand that it acknowledge a sovereignty dispute. The islands are surrounded by rich fishing grounds and a potential wealth of gas, oil and other undersea resources.

For Chinese, the dispute has reawakened bitter memories of Japan's conquest of Chinese territory beginning in 1895 and its brutal World War II occupation of much of the country.

Liu told one Davos session that the dispute with Japan, and a separate territorial dispute involving overlapping claims by six governments in the vast South China Sea, "are definitely challenges for China, which have definitely complicated China's relations with its neighbors."

China claims it has sovereignty over virtually all of the South China Sea and Chinese paramilitary ships confronted Philippine vessels last year in a months-long standoff over a shoal that both claim. The Philippines this week formally notified China that it is seeking international arbitration to declare Beijing's moves in the potentially oil-rich waters "unlawful."

Liu said "it will be very difficult to resolve" the South China Sea disputes "but I think negotiations will continue."

Liu also addressed China's relationship with the United States which he called "one of most important yet complex relationships in the world."

"China respects the security interests of the United States in the region, and welcomes its constructive role," he said. "Likewise, the United States needs to respect Chinese interests and concerns in the region, so that we could increase candid discussions."

Liu said the United States should avoid taking sides in the territorial disputes.

"Asia-Pacific region should not be an arena for China-U.S. competition or confrontation," Liu said.