NEW DELHI (REUTERS) - India, the United States and Japan will hold naval exercises in waters off the northern Philippines near the South China Sea this year, the US military has said, a move likely to further raise tensions with China.

The announcement on Wednesday (March 2) comes a day after the US warned China against militarisation of the South China Sea, where Beijing is locked in a territorial dispute with several countries, saying there would be consequences.

Last year, India and the US expanded their annual naval drills in the Bay of Bengal to include Japan after a gap of eight years, in a move seen as a response to China's growing assertiveness in the region.

Admiral Harry B. Harris, head of the US Pacific Command, said the naval exercise will be held in the northern Philippine Sea and that Japan will take part.

Freedom of the seas was a fundamental right of all nations, he told a security conference in New Delhi, adding some thinly veiled criticism of Beijing.

"While some countries seek to bully smaller nations through intimidation and coercion, I note with admiration India's example of peaceful resolution of disputes with your neighbours in the waters of the Indian Ocean, " he said.

Asked about the drills, Chinese Foreign Ministry spokesman Hong Lei said: "We hope the cooperation of relevant countries will benefit regional peace and security, and not harm the interests of third parties".

Tensions in the South China Sea have risen recently, with the US and others protesting against Beijing's land reclamations in the Spratly islands, along with the recent deployment of surface-to-air missiles and fighter jets in the Paracel Islands.

Along with China and the Philippines, Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims on the waters, through which about US$5 trillion (S$7 trillion) in trade is shipped every year.

Harris said the United States wished to expand the naval exercises it held with India each year into joint operations across the Asia-Pacific, which could draw India into the row in the South China Sea.

The two countries have held talks on joint naval patrols and last month a US defence official told Reuters that these could include the South China Sea.

Both India and the United States later said these patrols were not imminent after Beijing warned that interference from countries outside the region threatens peace and stability.

Harris said it was up to the leaders of India and the United States to decide where to hold the joint operations.