The Asean summit in Kuala Lumpur, Malaysia, also involves counterparts from the US and China.
US officials said China had lobbied members for the issue to be left out of the traditional closing statement.
But China said "certain other countries" had interfered.
China has been aggressively staking its claims in the resource-rich South China Sea by reclaiming land and building airstrips and facilities on disputed reefs, angering neighbours who have overlapping claims.
The US and others have accused China of militarisation, but China says the construction is legal and for civilian purposes.
The clash of words comes days after the US angered Beijing by sailing a warship in an area of the sea claimed by China.
Contested South China Sea
The Association of Southeast Asian Nations (Asean) makes decisions on a consensus basis, and has a principle of not getting involved in member's affairs.
Its defence meetings have in the past failed to produce joint declarations over disagreements over the South China Sea issue.
On Wednesday, Malaysia cancelled a planned signing ceremony for the joint statement, without giving a reason.
But a US official told reporters the talks broke down because China was insistent that the final statement omit any mention of the South China Sea, which several countries felt that was "inappropriate".
"This was an Asean decision but in our view no statement is better than one that avoids the important issue of China's reclamation and militarisation in the South China Sea," Reuters quoted the official as saying.
China's defence ministry issued a statement on its official microblogging Weibo account saying China had established a "common understanding" with Asean on the contents of the statement.
"But certain other countries disregarded this existing common understanding, attempting to force and insert content unrelated to this summit's discussion into the joint declaration, completely straying from the Asean defence meeting mechanism's aims and principles," it said.
"The blame lies completely with these other countries," it added.
A meeting of South East Asian defence ministers is to end without a joint statement, amid disagreements over mentioning China's activity in the South China Sea.