Japan's push for a permanent seat on the U.N. Security Council (search), backed by the United States, has laid bare age-old resentments among its neighbors.

The points of contention are numerous: territorial disagreements over a few tiny islets in disputed waters, anger over how foreign residents are treated within Japan and Japanese history textbooks that critics decry as revisionist.

Leading the opposition is China (search), which not only opposes Japan's bid to join the Security Council but reportedly supports giving India, a South Asian power, a permanent seat.

Last weekend, when a series of protests in Beijing and other Chinese cities left several Japanese nationals injured and businesses vandalized, China's premier refused to apologize, instead urging Japan (search) to undergo "deep and profound reflections" on its past as a wartime aggressor.

"Only a country that respects history, takes responsibility for history and wins over the trust of peoples in Asia and the world at large can take greater responsibilities in the international community," Premier Wen Jiabao said during a visit to India.

Some observers of the region say the flare-up is part of a decades-long diplomatic war that only Japan can call off.

"We have to acknowledge that Japan clearly has not adequately come to terms with its past," Robert Hathaway, director of the Asia Program at the Woodrow Wilson International Center for Scholars, told FOXNews.com.

While Japanese officials have expressed regret for atrocities committed during the occupations of China and then-unified Korea, critics say the nation's actions betray a lack of sincere contrition.

One example that particularly stings is Prime Minister Junichiro Koizumi's visits to the Yasukuni Shrine (search), which honors Japan's war dead, including the spirits of 14 Class A war criminals convicted by a U.S.-run tribunal following World War II.

That several Japanese leaders, including Koizumi's predecessor, still insist on referring to World War II as the "Great Asia War" and the Rape of Nanking (search) as an "incident" hasn't helped matters. While exact numbers aren't certain, it's estimated that after the three-month period was over, at least 300,000 Chinese were dead and more than 20,000 women had been raped in the city of Nanking.

Japan also refuses to acknowledge forcing up to 200,000 Korean, Chinese and Filipino women into sexual slavery — euphemistically referring to them as "comfort women" (search). The women were beaten, mutilated, forcibly sterilized and raped several dozen times a day by Imperial Army soldiers. Elderly survivors still travel to the Japanese Embassy in Seoul for a weekly demonstration demanding full recognition of what they endured.

Sixty years of peacetime later, Japan, China and South Korea are Asia's economic powerhouses, largely thanks to cooperation on trade and currency. Despite the bitter feelings, economists say the three are too interdependent not to resolve these latest disputes, especially as China's growth spurt continues.

"Japanese business was by some significant degree brought out of its flat condition by the growth of Chinese economic activity and Chinese importation of commodities and services," former House Speaker Thomas Foley told FOXNews.com, referring to Japan's emergence from an economic crisis in the 1990s. Foley, a Democrat from Washington state, served as the U.S. ambassador to Japan from 1997 to 2001.

Woodrow Wilson's Hathaway said that Japan and China know better than to let tensions spiral out of control.

"I'm inclined to think that at the end of the day cooler heads will prevail," he told FOXNews.com. "It's in neither country's interest, nor South Korea's interest, let alone America's interest, for these tensions and fears to be allowed to trigger a serious crisis in the region."

The State Department called the skirmish "unfortunate," and a spokesman declined to comment more specifically when reached by FOXNews.com. On a visit in Japan last month, Secretary of State Condoleezza Rice said, "Japan has earned its honorable place among the nations of the world with its own efforts," before declaring Washington's unequivocal support for its permanent seat bid.

Japan, for its part, may be embarrassed to see its dark past dredged up the very moment it wants the world to see it as a leader on par with the United States and Britain. But government officials aren't letting on — and that may be part of the problem.

A Nation in Denial?

While a number of Japanese citizens have expressed regret for an imperialistic past and urged Koizumi to stop visiting the Yasukuni Shrine, a resurgence of right-wing nationalism has set off alarms across the region.

Perhaps more disturbingly, Western scholars who have studied Japan say the populace is so fuzzy on the details of their own history that many believe well-documented historical facts such as the Rape of Nanking and the taking of sex slaves are up for debate.

"You can talk to perfectly educated Japanese and when you bring up one of those topics, they'll say, 'You know, the facts are still in dispute. I've read a lot of stuff and we don't know what happened, it's very confusing,'" journalist Adam Gamble told FOXNews.com. "There's either confusion or ignorance about it."

Gamble is co-author of "A Public Betrayed," a study of the Japanese news media. Along with co-author Takesato Watanabe, a professor of media ethics at Doshisha University in Tokyo, he examined how nationalist elements in the media have distorted the public's perception of World War II.

For those unfamiliar with the history of the region, Gamble suggests imagining a present-day Germany in which the newspaper Der Spiegel regularly runs Holocaust denials and Chancellor Gerhard Schroeder pays solemn tribute to the Nazis. Major Japanese media outlets have run Holocaust-denial stories and have blamed Western economic failures on "the Jews," two phenomena explored in "A Public Betrayed."

While in some instances the widespread ignorance has translated into discrimination against Chinese and Koreans living in Japan, most observers say better access to accurate information would set off a cultural sea change.

"If the Japanese people were to go through the soul-searching process that many have celebrated Germany for having done, the average Japanese person — they're like people everywhere else — would be outraged at what was done in their names. It would create political turmoil, to say the least," Gamble said.

South Korean President Roh Moo-hyun, who was coincidentally on an official visit to Germany earlier this week, pointedly said on Tuesday that Germans should be admired for facing their past head-on and regaining the trust of the world by their actions.

And China, the only representative of Asia among the current five permanent members of the Security Council, may not want a "normalized" Japan in that exclusive club.

But like it or not, former Ambassador Foley says, the world's most populous country will have to learn to make room.

"The Security Council, frankly, represents the power arrangements of the world in 1945," Foley told FOXNews.com, adding that including the world's No. 2 economy would only "reflect 21st century political and economic realities."

Moreover, China has a still-spotty human rights record, no free press, no true academic freedom and is not anywhere near becoming a democracy.

"If China is ready, then Japan is ready" for a permanent seat on the council, said Joshua Fogel of the University of California at Santa Barbara.

Fogel pointed out that China is still so tightly controlled that what may appear to be a spontaneous political demonstration is likely much more. He also disputed the characterization of Japan as extremist, saying the right-wing, racist element there was about as dominant as it is in the United States.

China's complaints, he said, were almost cartoonish in light of a substantial left-wing presence in Japanese culture and "the most meticulous scholarship" in the region on Japan's wartime atrocities. (Indeed, Tokyo first acknowledged "comfort women" after a Japanese professor unearthed documents proving they were used.)

"The Chinese are constantly making demands that the Japanese apologize ever more prostrately," Fogel told FOXNews.com. "A number of Japanese in the center say, 'This is enough, already. They can't dictate our foreign policy anymore.'"

Thomas Plate, who writes extensively on Far East politics and is director of the UCLA Media Center (search), agreed that Beijing was trying to leverage the weekend's protests to its political advantage, and warned that ripple effects from the fast-deteriorating relations in the region could very well reach America's shores.

"They are our customers, they're financing Bush's deficits," he told FOXNews.com, adding the Japanese apology issue was largely a distraction.

"The issue of whether they were bad in the past is a different issue from whether they should be on the council as a permanent member," Plate said. "The Japanese are deeply ashamed by what happened in World War II. They are never going to come up with an apology that will satisfy those who want to be satisfied."