The outbreak of President Baron Waqa followed an exchange of tensions at the summit he will hold on Tuesday when China's Du Qiwen tried to lead a meeting on climate change, but Waqa refused to let him speak.
Du and the Chinese delegation left in a hurry, with Du reportedly striding across the room to emphasize their disgust before leaving.
Waqa, whose country backs Taiwan on its arch rival China in the battle for diplomatic recognition, had already infuriated Beijing before the summit began in a row for visas.
Nauru refused to seal entry visas on Chinese diplomatic passports, saying it would only process their personal passports.
Although it seems a minor detail, it prompted boycott threats from other PIF members, many of whom receive development assistance and concessional loans from Beijing.
Waqa, whose country has a population of just 11,000 and covers an area of 21 square kilometers (8 square miles), did not flinch from disagreeing with the world power.
He accused Du of trying to exercise his influence and not respecting the fact that the national leaders at the meeting overcame him and deserved to be heard first.
"He insisted and was very insolent, and created a big scandal, and kept the leaders meeting for a good amount of minutes, when he was just an official," Waqa told a news conference Tuesday night.
"Maybe because he was from a large country, he wanted to intimidate us."
The exchange highlighted the sensitivities of Beijing's growing influence in the Pacific, where China provided an estimated US $ 1.78 billion in aid to island nations between 2006-16.
The "soft power" exercised by Beijing has alarmed Australia and New Zealand, with both countries pushing their own aid programs in an attempt to maintain influence in a region they consider their backyard.
China does not belong to the PIF, but it is one of 18 countries that assists as a "dialogue partner" for discussions with member countries.
Meanwhile, a New Zealand journalist who was placed in police custody for interviewing an asylum seeker has questioned the official version of his treatment.
Nauru officials insisted that TVNZ journalist Barbara Dreaver was not arrested and that the police "voluntarily accompanied", but Dreaver said that was not the case.
"For the record, I did not voluntarily accompany the police," he said.
"They ordered me to turn off the camera, confiscated my phone for 3-4 hours, they told me that I had broken the visa conditions, they told me they were taking me to the police station and they ordered me to get on the police vehicle.
"They were professionals throughout the process, but it was not voluntary."
The plight of some 900 refugees on the island under Australia's hard-line immigration policies has threatened to eclipse the summit, despite attempts by Nauru authorities to control visiting journalists.
Dreaver's PIF accreditation was initially revoked, but she said on Wednesday that it had been returned.
"I just got readmitted to the Pacific Islands Forum, now I can do my job," he wrote on Twitter.