State-owned China Telecom on Thursday, rejected US claims that its servers "hijacked" highly sensitive Internet traffic on American government and military websites earlier this year.
A report presented to Congress on Wednesday, said the firm rerouted email traffic to and from websites of the US Senate, the Department of Defense, and "many others" including national space agency NASA for 18 minutes on April 8.
The rerouting began at a smaller Chinese Internet service provider called IDC China Telecommunication before being propagated by China Telecom, said the report, compiled by the US-China Economic and Security Review Commission.
However the listed arm of China Telecom, one of the country's major telecommunications operators, said in a statement that the company "denied any hijack of Internet traffic".
The US report said that some 15 percent of the Internet's entire traffic was routed through Chinese servers during the brief period.
"What could you do if you had the stream of email traffic for 18 minutes" to and from the US Joint Chiefs of Staff, asked commissioner Larry Wortzel on Wednesday.
"Most importantly you would get the Internet addresses of everybody that communicated" and be able to engineer an address to plant a virus, he said.
Leading web security firm McAfee has warned of a rise in cyberattacks with political objectives, pointing to China as one of the leading players in assaults on foreign networks.
US targets include the White House, Department of Homeland Security, US Secret Service and Department of Defense, it said in its report last year.
Former US intelligence chief Michael McConnell told lawmakers in February that the United States would lose a cyberwar if it fought one today. "We're the most vulnerable, we're the most connected, we have the most to lose," he said.
McConnell, who served as ex-president George W. Bush's director of national intelligence, warned that because the United States was failing to effectively mitigate the risk, "we are going to have a catastrophic event."
China's capacity to launch cyberattacks on US commercial interests was also highlighted this year when Internet giant Google said it had become the target of a series of sophisticated assaults on its networks.
The search engine giant subsequently rerouted mainland users to its site in Hong Kong and threatened to completely shutter its operations in China.
The commission on Wednesday recommended Congress call on the administration of President Barack Obama to formally investigate the "volume and seriousness of exploitations and attacks" targeting federal agencies that handle sensitive military and diplomatic information.