U.S. President Barack Obama's attendance at an annual summit of Southeast Asian leaders today thrust him right in the eye of the region's most stormy dispute: The long-raging rivalry between China and five neighbours for control of strategic and resource-rich waters in the South China Sea.

The inability to resolve these territorial conflicts has become a major impediment to the 10-member Association of Southeast Asian Nations (ASEAN) as it tackles ambitious dreams, such as a plan to turn the economically vibrant region of 600 million people into an European Union-like community by the end of 2015.

South China Sea

Neither the U.S. nor China is a member of ASEAN, but each has strong supporters in the group. Summit host Cambodia, an ally of China, has tried at this week's summit to shift the focus to economic concerns, but Beijing's territorial disputes with its ASEAN neighbours — including staunch U.S. ally the Philippines — have yet again overshadowed discussions.

The disagreement sparked a tense moment Monday when Philippine President Benigno Aquino III challenged Cambodian Prime Minister Hun Sen, who had tried to cut off a discussion about the territorial disputes.

Washington wants 'code of conduct'

Into this heated atmosphere came Obama, who flew to Phnom Penh for Tuesday's expanded East Asia Summit, in which the 10 ASEAN countries were joined by eight other nations, including China and the United States. Behind closed doors, the leaders from China and the Philippines pressed their territorial claims while others called for restraint.

After the summit, the exchange shifted to the chandelier-lit lobby, where diplomats of the two countries reiterated their positions.

Senior Chinese diplomat Fu Ying expressed dismay that the disputes again got the spotlight. "We do not want to bring the disputes to an occasion like this and we do not want to give over-emphasis to the territorial disputes and differences," she said.

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Chinese Deputy Foreign Minister Fu Ying expressed dismay Tuesday that territorial disputes overshadowed talks at an annual summit of Southeast Asian leaders Tuesday in Phnom Penh. (Hoang Dinh Nam/AFP/Getty Images)

The U.S. has reiterated that it takes no sides in the territorial disputes but would not allow any country to resort to force and block access to the South China Sea, a vital commercial and military gateway to Asia's heartland.

The U.S. has also called for the early crafting of a "code of conduct" to prevent clashes in the disputed territories, a call backed by Australia and Japan, but it remains unclear if and when China will sit down with rival claimants to draft such a legally binding non-aggression pact.

Islands, sea contested by 6 nations

The potentially oil- and gas-rich South China Sea islands and waters are contested by China, Taiwan and four ASEAN members — Brunei, Malaysia, the Philippines and Vietnam.

The last fighting, involving China and Vietnam, killed more than 70 Vietnamese sailors in 1988, and fears that the conflicts could spark Asia's next war have kept governments on edge.

Vietnam and the Philippines, backed by Washington, have been loudest on the issue, and want China to negotiate with the other claimants as a group. China wants one-on-one negotiations — which would give it an advantage because of its sheer size and economic clout — and has warned Washington to stay away from an issue it says should not be "internationalized," a position echoed by Cambodia at the Phnom Penh summit.

There have been several recent standoffs involving boats and other shows of force, particularly between China and the Philippines, which both claim ownership of the Spratly Islands, a spray of tiny South China Sea atolls.

Controversial post-summit statement

Their latest diplomatic confrontation occurred a few hours before Obama touched down Monday in the Cambodian capital, when Hun Sen announced as he was closing a meeting that all ASEAN leaders have struck an agreement to limit discussions of the divisive issue within the 10-nation bloc's talks with China.

Alarmed, Aquino raised his hand, stood up and objected to Hun Sen's statement, saying his country, which plans to bring the disputes before a UN tribunal, was not party to any such agreement. It was a blunt gesture in the usually servile ambiance of the conservative bloc, an unwieldy collective of rigid, authoritarian regimes and nascent democracies.

'The bottom line is they can talk all they want but if we said we're not with it, there's no consensus, finished.' —Albert del Rosario, Philippine foreign secretary

After a brief lull, Hun Sen recovered and said Aquino's remarks would be reflected in the record of the meeting. Still, Cambodian and Chinese officials insisted that the agreement stood. Tensions intensified Tuesday when the Philippines was joined by Vietnam and Singapore in objecting to a plan by Cambodia to state in a post-summit statement by the host country that there was indeed such an agreement, Philippine diplomats said.

An objection from the Philippines, or any ASEAN nation, ought to be enough to thrash any agreement because the bloc decides by consensus, meaning just one veto from any member kills any proposal.

"The bottom line is they can talk all they want but if we said we're not with it, there's no consensus, finished," Philippine Foreign Secretary Albert del Rosario told reporters.

The dispute, and Obama's presence here, highlights how ASEAN has become a major battleground for influence in Asia, just like the South China Sea. The U.S. is pushing its "Pacific pivot" to the region following years of engagement in Iraq and Afghanistan. China, the Asian superpower, has acted to protect its home ground.