Avoiding conflict between the Koreas over the sinking of a warship is an urgent task, China's premier said on Sunday as Beijing appeared more engaged in the crisis despite withholding support for possible UN action against North Korea.

Chinese Premier Wen Jiabao's comments came at the end of a weekend summit with Japanese and South Korean leaders that was closely watched for signs that Beijing would get tougher on North Korea, accused of sinking the South Korean naval ship Cheonan with a torpedo, killing 46 sailors two months ago.

Wen gave no clear indication that Beijing was ready to endorse South Korea's plans to haul North Korea before the UN Security Council for sanctions or condemnation. China's backing would be key because it wields veto power at the Security Council as a permanent member.

Nevertheless, Wen used China's strongest language yet to describe the grave situation between its longtime ally North Korea and South Korea, a vital trading partner.

"The urgent task for the moment is to properly handle the serious impact caused by the Cheonan incident, gradually defuse tensions over it and avoid possible conflicts," Wen said at a joint news conference with his South Korean and Japanese counterparts.

"China will continue to work with every country through aggressive negotiations and cooperation to fulfill our mission of maintaining peace and stability in the region," he said after the meeting on the South Korean resort island of Jeju.

Wen's comments were markedly different from those made last week by Chinese officials, who appeared reluctant to become involved or asked for more time to gather the facts about the sinking.

A multinational investigation - including the United States, Britain, Australia and Sweden - blamed North Korea for the attack. The North has dismissed the probe and has repeatedly denied responsibility for the sinking - the South's worst military loss since the Korean War in the 1950s.

On Sunday, a massive crowd of North Koreans packed the main square in Pyongyang, the nation's capital, for a rally condemning South Korea and the US. The isolated North often organizes such events during tense times with foreign countries.

The protesters shouted anti-South Korean slogans and held signs saying, "Anyone who infringes on us will not avoid death," according to video footage from APTN in North Korea. North Korean leader Kim Jong Il was not featured in the footage.

After Sunday's meeting, South Korean President Lee Myung-bak said the three countries agreed to continue discussing the ship disaster. "I expect Japan and China, as very responsible members of the international community, to wisely cooperate in handling of this matter," Lee said.

Japanese Prime Minister Yukio Hatoyama added that the three nations have "a common view that it (the ship sinking) is a serious matter for peace and stability in Northeast Asia."

Last week, South Korea laid out a series of punitive measures, including slashing trade, resuming anti-North Korean propaganda broadcasts across the border and launching large-scale naval exercises off the western coast.

The North warned the South's moves would push the peninsula closer to war.

The two Koreas are still technically at war because their 1950-53 Korean War ended with an armistice, not a peace treaty. The US stations 28,500 troops in South Korea in a legacy of the war.