Bhutan on Friday rejected the Chinese state media report claiming that the Chinese authorities have set up a village more than 2 kilometres inside Bhutanese territory.
"There is no Chinese village inside Bhutan," Major General Vetsop Namgyel, Bhutanese Ambassador to India, told ANI.
This comes after Shen Shiwei, news producer for CGTN, Chinese state-sponsored media, had tweeted, "Now, we have permanent residents living in the newly established Pangda village. It`s along the valley where 35 km south to Yadong county."
Later the tweet was removed.
However, it is to be noted that satellite imagery and map locations have showb what appears to be the Chinese settlement near the contested Doklam platueu area.
An NDTV report also cites official maps stamped by the Bhutanese government, which show that the Chinese settlement lies "well within Bhutan's present claim lines".
The report also quotes international observers and satellite imagery experts as challenging Bhutan's denial of what is being called a "clear breach of Bhutan's sovereignty".
The Pangda village lies 2 kilometres within Bhutanese territory.
India and Bhutan share relatively warm diplomatic ties, with India promising Bhutan to provide the coronavirus vaccine when it is ready.
Prime Minister Narendra Modi on Friday also announced that India will soon be sending Bhutanese satellite to space.
"India opened its space sector for private enterprises. It will boost innovation, capacity and skills. ISRO will be sending Bhutan`s satellite next year and work on that is progressing fast," he said.
China and Bhutan do not have diplomatic relations but maintain contacts through periodic visits by officials. The two countries have held 24 rounds of boundary talks in a bid to resolve the boundary dispute.
China's claim over Bhutanese territory came in the midst of Beijing's aggressive moves in eastern Ladakh along the Line of Actual Control
China is also engaged in hotly contested territorial disputes in both the South China Sea and the East China Sea. China claims almost all of the South China Sea. Vietnam, the Philippines, Malaysia, Brunei and Taiwan have counter claims over the area.
(With inputs from agencies)