Updated

Three Japanese detained after allegedly intruding on a Chinese military zone were released Thursday, but one person was still being held amid simmering tensions after ships collided near disputed islands.

The three were freed after admitting to violating Chinese law but the fourth, identified as Sadamu Takahashi, remained under house arrest and was being investigated for illegally videotaping military targets, China's official Xinhua News Agency reported.

The four were detained outside the northern city of Shijiazhuang on Sept. 21 amid a bitter territorial dispute between the countries triggered by a Sept. 7 collision between a Chinese fishing trawler and two Japanese patrol boats near disputed islands in the East China Sea.

Tokyo released the fishing boat captain and said China needs to resolve the case of the four as the first step toward repairing ties.

China's Foreign Ministry has denied any link between the detentions and the islands incident, and says it has allowed access to them by Japanese diplomats, as required by consular treaty.

Despite that, the detentions have been widely interpreted as one of a series of retaliatory moves aimed at pressuring Japan into acceding to Beijing's demands over the islands issue.

Beijing had suspended provincial and ministerial-level contacts with Japan, along with talks on mutual development of gas-and-oil deposits in the East China Sea. China also reportedly suspended exports of rare earth minerals crucial to Japan's high-tech sector and stepped-up customs inspections, slowing trade between Japan and its biggest export market.

Foreign Minister Seiji Maehara confirmed the three were released, and said Tokyo was seeking an "early resolution" to the continued detention of Takahashi.

Prime Minister Naoto Kan, meanwhile, reasserted Thursday Japan's claims to the disputed islands, known as Diaoyutai or Diaoyudao in Chinese and Senkaku in Japanese.

"Territorial problems do not exist between Japan and China," Kan told a parliamentary budget meeting.

The four detained are employees of Fujita Corp., a Tokyo-based construction and urban redevelopment company, which has said the men were in China working to prepare a bid for a project to dispose of chemical weapons abandoned in China by the Japanese military at the end of World War II.

The company has identified the other three as Yoshiro Sasaki, 44, Hiroshi Hashimoto, 39, and Junichi Iguchi, 59.

The latest confrontation plunged relations between the sides to their lowest level since the 2001-2006 term of former Prime Minister Junichiro Koizumi, whose repeated visits to a war shrine in Japan enraged China and sparked a wave of violent anti-Japanese protests across the country.

The spat — and China's unusually strong response — also raised questions about cooperation between the Asian powers at international meetings. Kan and Chinese Premier Wen Jiabao essentially ignored each other at a recent gathering at the United Nations and have no plans to meet at a major Asia-Europe forum in Belgium this weekend.

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Associated Press writer Shino Yuasa in Tokyo contributed to this report.