China on Thursday strongly condemned a $5.85 billion US deal to upgrade Taiwan's fleet of F-16 fighter jets, summoning the US ambassador and warning the move would undermine warming military relations.

China, which claims Taiwan as part of its territory, urged the United States to cancel the deal and said it had jeopardised recent improvements in military ties between the two world powers and affected relations with Taiwan.

But analysts said the deal, which stopped short of selling new planes to Taiwan, would probably not be as damaging as an earlier arms package that led to a break in China-US military exchanges in 2010.

"The Chinese military expresses great indignation and strong condemnation," the defence ministry said in a strongly-worded statement, announcing it had called in the acting US military attache for talks.

"US actions have caused serious damage to Sino-US military relations, and have seriously undermined the good momentum of the peaceful development of cross-strait relations."

Vice foreign minister Zhang Zhijun urged Washington to "immediately cancel the wrong decision" and summoned US Ambassador Gary Locke to protest against the deal, branded a "huge mistake" by China's top newspaper.

"If American politicians feel that the United States can irresponsibly and randomly damage China's core interests without paying the price, this is a major and huge mistake," said the People's Daily, considered the mouthpiece of China's Communist Party.

But Jean-Pierre Cabestan, political science professor at Hong Kong Baptist University, said Beijing had learned lessons from the 2010 break-off in military ties and was unlikely to react as strongly this time.

"They are going to react, to get angry, and the military may take measures to better counter these retrofitted F-16s, but they will not break military ties with the United States like they did before," he told AFP.

"They're (China) in a new phase -- more flexible and accommodating, and with the Taiwanese electoral factor, it reduces their room for manoeuvre a lot and it will force them not to over-react on this."

Taiwan's President Ma Ying-jeou of the Beijing-friendly Kuomintang will seek re-election in January and Cabestan said China would be keen not to cause any upsets ahead of the polls.

Russell Leigh Moses, a Beijing-based political analyst, said China's reaction was an exercise in "how to avoid slamming the door while shouting".

"I think that Beijing's outrage has multiple audiences, in particular those at home on the mainland and in Taiwan," he said.

"There are ways in which they could have said hardly anything, but the consensus clearly was -- we'll go into the default mode of being pretty upset and angry, but not like it was a year ago."

Taiwan first lodged a request to buy 66 F-16 C/D fighters -- which have better radar and more powerful weapons systems than its F-16 A/Bs -- in 2007 in response to China's growing military muscle.

The deal to upgrade the existing fleet includes equipment, parts, training and logistical support.

Observers and media in Taiwan said that while the deal may mean little in any war with China, it represented a valuable sign of US commitment to help the island's defence.

"This is a US compromise to satisfy some of Taiwan's defence needs and maintain friendly ties with Taiwan without touching China's bottom-line by selling new jets," said Kenneth Wang, a military expert at Taiwan's Tamkang University.

Washington recognises Beijing rather than Taipei, but remains a leading arms supplier to the island of 23 million inhabitants, providing a source of continued US-China tension.

However, relations between the US and Chinese militaries have improved over the past year and in July, Mike Mullen became the first chairman of the US Joint Chiefs of Staff since 2007 to visit China.

Ties between China and Taiwan have improved since Ma came to power in 2008, but Beijing has refused to renounce the use of force against the island, even though it has ruled itself for more than six decades since their split in 1949.