Relations between the world's second- and third-largest economies have been strained for months, largely because of the spat over the islands, known as the Senkaku in Japan and the Diaoyu in China. (Agencies)
Japanese Prime Minister Shinzo Abe is keen to improve ties and has called for high-level dialogue with China, though he has rejected any conditions on talks where as China has shown no inclination to hold any such talks.
Li said that Japan's call for high-level talks was not genuine, but merely grandstanding.
"A meeting between leaders is not simply for the sake of shaking hands and taking pictures, but to resolve problems," Li said.
"If Japan wants to arrange a meeting to resolve problems, they should stop with empty talk and doing things for show," Li said, when asked about the possibility of a meeting of Chinese and Japanese leaders on the sidelines of the G20.
Aircraft and ships of both the countries have played a cat-and-mouse game near the islands for months, ratcheting up tension.
Japan's Coast Guard said on Tuesday that three Chinese Coast Guard vessels had entered what Japan considered to be its territorial waters near the disputed islands. China said that the trip was a routine patrol in its own waters.
“Moves by some Japanese politicians to deny the country's wartime past do not help. Under these conditions, how can we organize the kind of leaders' summit that Japan wants?" Li added.
China reacted with fury this month after Abe sent an offering to a shrine for war dead, which also honours war criminals, while cabinet members visited it in person.
China suffered under Japanese rule, with parts of the country occupied from the 1930s. Japanese leaders have apologized in the past but many in China doubt their sincerity, partly because of contradictory remarks by politicians.
"What Japan has to do now is show vision and courage, properly face up to history and take a proper attitude and real actions to get rid of the obstacles which exist for the healthy development of bilateral ties," Li said.
Relations between the world's second- and third-largest economies have been strained for months, largely because of the spat over the islands, known as the Senkaku in Japan and the Diaoyu in China.