China's premier has called on Southeast Asian nations to set aside their differences as tensions rise over the disputed South China Sea islands, state news agency Xinhua reported late on Saturday.

"In recent years, the South China Sea disputes, which should have been addressed by directly concerned countries through negotiation and talks, have been played up to become a problem concerning the South China Sea's peace and stability and the freedom of navigation," Chinese Premier Li Keqiang said in Kuala Lumpur according to Xinhua.

China, which claims almost the entire energy-rich South China Sea, has been transforming reefs into artificial islands in the Spratly archipelago and building airfields and other facilities on some of them. That has prompted concerns in Washington and across the region that Beijing is trying to militarise its claims in the South China Sea.

Vietnam, the Philippines, Malaysia, Taiwan and Brunei also have territorial claims in the South China Sea.

At a meeting with the Association of Southeast Nations (ASEAN) in Kuala Lumpur on Saturday, U.S. President Barack Obama called on countries to stop building artificial islands and militarising their claims in the South China Sea.

The United States has sent military ships and war planes by China's artificial islands in recent weeks to assert its "freedom of navigation" in the sea.

Premier Li said some countries outside the region are conducting a high-profile intervention.

"That is in nobody's interest," Li said. "Only by expanding our common interests and seeking common ground can we narrow our differences," Li added.