Hoping to open the door to deeper economic ties, the leaders of Japan and Russia agreed to seek "specific" progress over the next year toward signing a peace treaty to formally end their World War II hostilities, Japanese officials said.
In a bilateral meeting with Russian President Vladimir Putin on the sidelines of the annual G8 summit on Wednesday, Japanese Prime Minister Junichiro Koizumi suggested they put a "priority on making specific progress" toward concluding the treaty over the next year.
Koizumi noted that next year is the 150th anniversary of diplomatic relations between their nations.
Putin agreed that concluding the treaty was important, according to delegation officials who briefed reporters on condition of anonymity.
Although economic ties between the two countries have expanded in recent years, Tokyo and Moscow have failed to sign the treaty because of an emotional dispute over the ownership of several small islands off the coast of the Russian Far East.
The islands in the southern Kurile chain -- called the "Northern Territories" in Japan -- were occupied by Soviet troops in the closing days of World War II.
Neither side has shown any significant willingness to compromise on the dispute, however, and officials acknowledged that no new proposals were discussed at Wednesday's meeting.
But in contrast with their predecessors, Koizumi and Putin have shifted their emphasis from resolving the islands impasse to expanding economic cooperation, an area in which both countries could benefit substantially.
Japan is particularly interested in gaining access to Russian oil and natural gas reserves, and is already involved with the Russians in multibillion dollar projects to develop offshore fields near the disputed islands.
Moscow has also recently indicated it is leaning toward a Japanese-backed plan to run a pipeline from Siberia to the Pacific port of Nakhodka, where the oil could then be shipped to Japan.
China had tabled a rival plan that would have had the pipeline terminate near its own border.
Japan, with almost no natural resources of its own, is heavily dependent on oil, which accounts for about 52 percent of its primary energy consumption. More than 80 percent of the country's oil comes from the Middle East.
Although Putin made no firm commitment on the pipeline, Koizumi and Putin agreed on its importance and its potential benefits for Japan, according to the Japanese delegation officials.
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