The United States and Japan moved Thursday to modernize and expand their defense alliance to counter new 21st century challenges including the continuing threat from nuclear-armed North Korea and potential aggression from China over disputed territory.

Revamping the guidelines of their defense partnership for the first time in 16 years, the allies agreed to position a second early-warning radar in Japan within the next year to help protect against North Korea. And by next spring, they will deploy new long-range surveillance drones to help monitor disputed islands in the East China Sea, a move that may well raise tensions with Beijing.

The foreign and defense ministers of the two countries also, for the first time, put a price on what Japan will contribute to the relocation of Marines out of Okinawa to Guam and other locations in the Asia-Pacific region. Japan will pay up to $3.1 billion of the move, which includes development of new facilities in Guam and the Northern Mariana Islands.

U.S. Secretary of State John Kerry and U.S. Defense Secretary Chuck Hagel met with Japanese Foreign Minister Fumio Kishida and Defense Minister Itsunori Onodera and afterward laid out the details of the session. The talks, ahead of President Barack Obama’s visits to Indonesia and Brunei next week, were aimed at modernizing the American-Japanese alliance that both sides maintain is a cornerstone of peace and stability in North Asia.

“Japan is changing and so is its neighborhood,” Kerry told reporters at a press conference after the meeting. “So we’re coming together now to modernize our deep cooperation, through both our military alliances and our diplomatic partnerships, and that is so we can better prevent and respond to the ever-changing threats of the 21st century.”

The deep neighborhood divisions were underscored, even as the meeting went on, when a new naval exercise between the U.S., Japan and South Korea scheduled for next week was disclosed, provoking a swift response from North Korea. In a statement, the National Peace Committee of Korea condemned the exercise, which will include the USS George Washington aircraft carrier and its strike group, as reckless saber-rattling.

The new X-band radar system, in fact, is designed to protect the region against the North Korean threat, boosting Japan’s ability to track and intercept missiles from across the Sea of Japan. Officials have stressed it is not directed at China. Kerry acknowledged the threat from Pyongyang, but also said the U.S. was willing to sign a non-aggression pact with North Korea if it gives up its nuclear weapons and complies with international demands.

The drones, meanwhile, are designed in part to help step up surveillance around the Senkaku islands, a source of heated debate between Japan and China. Under the plan, two or three will fly out of a U.S. base. While the U.S. has operated unmanned aircraft over Japan in the past, for example during the 2011 tsunami, this would be the first time that drones would be based in Japan.

More broadly, the documents agreed to on Thursday contain no direct mention of the Senkakus, easily one of the most contentious issues affecting security in the Pacific. Despite that, the territorial dispute over the remote, uninhabited islands was a prime topic during the meeting and of the statements by the leaders afterward.

Hagel said the U.S. reiterated that while Washington takes no side on the question of the islands’ sovereignty, it recognizes Japan’s administration of them and has responsibilities to protect Japanese territory under a mutual defense treaty.

“We strongly oppose any unilateral or coercive action that seeks to undermine Japan’s administrative control,” he said.

China’s Foreign Ministry did not immediately respond to a request for comment Thursday, which is part of a weeklong national holiday. Beijing has criticized the installation of the first military radar system, as announced last month, to monitor Pyongyang’s military activities. Foreign ministry spokesman Hong Lei then said the plans could affect regional stability and upset the strategic balance.

The U.S. has watched warily as tensions between Japan and China have heated up over the Senkakus, badly souring their relations and leading to bellicose talk and actions from both sides. China has increased patrols near the Japanese-administered islands that it calls Diaoyu.

Successive U.S. administrations have held to the position that the two nations must sort out their differences over the Senkakus peacefully, and that remains the case. U.S. officials said the position was so well known that there was no need to address it in the agreements.

Kishida, referring to the island dispute as well as the ongoing North Korea threat, said the security environment “has become increasingly severe.” He added, “We are decidedly opposed to the attempt to change the status quo through coercion. Rule of law is critically important.”

A senior administration official said the U.S. continues to believe that the most effective policy is to continue to make those points publicly and privately while encouraging the two sides to tone down rhetoric and refrain from actions that may be seen by the other as provocative. It is not in U.S. interests, nor those of Japan or China, for the chill between Tokyo and Beijing to be prolonged, the official said.

Kerry said the U.S. continues to have frank discussions with China, laying out “lines that shouldn’t be crossed.” He added that “a rising China is welcome as long as that China wants to engage according to international standards.”

The islands, also claimed by Taiwan, stir a depth of nationalist passion that belies their size and remoteness. They are located roughly midway between Taiwan and the southern Japanese island of Okinawa, and cover a total area of just 2.3 square miles.

The senior official said the new radar, which was initially announced by then-Defense Secretary Leon Panetta about a year ago, will provide better coverage in the event of a North Korean attack. There already is one of the X-band radar systems in the northern part of Japan, but the official said the second one, to be located in the Kyoto Prefecture, will fill gaps in coverage.

The official said details about the deployment of the U.S. Global Hawk drones were still being worked out. The plans also included deployment of F-35 jet fighters for the Marines around 2017. And, for the first time, the U.S. will deploy Navy P-8 anti-submarine aircraft outside the U.S., sending them to Japan later this year.

More broadly, the 10-page statement signed by Kerry and Hagel was designed to improve military and diplomatic relations with Japan, while working to reduce America’s troop footprint on the island.

The U.S. force of 50,000, particularly troops in Okinawa, has increased tensions between the two nations, over the military’s land use, crimes committed by service members and disruptions by military flights in the heavily-populated region.

Under plans announced last year, about 9,000 Marines stationed on Okinawa will be moved out. The decision also reflects the Obama administration’s effort to focus greater attention on the Asia-Pacific, and spread troops more widely across the region.

About 5,000 Marines will go to Guam. The total cost of the relocation is about $8.6 billion.

Earlier Thursday Kerry and Hagel visited the secular Chidorigafuchi National Cemetery, where the remains of more than 350,000 unidentified war dead from World War II are laid to rest.

They did not go to the nearby Yasukuni Shrine, a controversial monument that honors 2.5 million Japanese soldiers who died in wars from the late 1800s until 1945, including convicted war criminals.

(AP)