WASHINGTON (AFP) - The United States warned on Thursday that China's effort to expand its territory in the South China Sea by building on disputed islands was a threat to regional stability.

A newly released set of satellite images has revealed that China is artificially expanding a reef in disputed waters, presumably to strengthen its territorial claims.

"In our view, China's land reclamation and the construction activity are fuelling greater anxiety within the region," State Department spokesman Jeff Rathke told reporters.

Rathke said Washington is concerned that China "might militarise outposts on disputed land features of the South China Sea.

"So we are watching these developments closely and we continue to raise our concerns with China as well as with others in the region to urge all parties to avoid destabilising activities.

"And we encourage all claimants as we have for a long time to pursue peaceful and diplomatic approaches to maritime and territorial disputes in the South China Sea," he added.

Satellite images on the website of the Centre for Strategic and International Studies show a flotilla of Chinese vessels dredging sand onto a feature known as Mischief Reef.

Images of other outcrops in the Spratly Islands show aircraft runways appearing from jungle, smooth-sided solid masses where there once was coral and man-made harbors replacing natural reefs.

Analysts say the pictures show how China is attempting to create "facts in the water" to bolster its territorial claim.

Beijing asserts sovereignty over most of the South China Sea, including areas close to the coasts of other states, using a line that first appeared on Chinese maps in the 1940s.

The Philippines, Vietnam, Malaysia, Brunei and Taiwan all have overlapping claims.

The United States has no claim of its own, but broadly supports its Asian allies against Chinese pressure and has asserted that freedom of navigation is in its national interest.