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The BBC's Charles Scanlon in Tokyo
"The mutual hostility of the past is much reduced"
 real 56k

Japanese government spokesman, Ryu Yamazaki
"It is very difficult for both sides"
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Tuesday, 5 September, 2000, 03:28 GMT 04:28 UK
Kuril islands dispute deadlocked
Russian President Vladimir and  Japanese Prime Minister Vladimir Putin and their wives toast at Tokyo reception.
A friendlier atmosphere for future talks
Japan and Russia have agreed to continue talks to resolve the status of four disputed islands, which has held up a final peace agreement between both sides since the end of World War II.

At the end of his three-day visit to Japan, Russian President Vladimir Putin and Japanese Prime Minister Yoshiro Mori said they had agreed to continue discussions over the issue but gave no deadline for its resolution.

"We confirmed the need to keep on discussing toward signing a peace treaty upon solving the issue of the ownership of the four islands," Mr Mori told journalist at press conference with President Putin.

Mr Putin said he had invited Mr Mori to Moscow for continued discussions.

"We had a frank exchange of views, deepening our understanding of each other's positions.

"We made efforts to find a compromise but in the end we could not resolve the peace [treaty] issues," Mr Putin told journalist.

Irreconcilable positions

Kuril islands

Earlier reports said Mr Putin had ruled out the hand over four disputed islands, which Japan calls its Northern Territories and Russia administers as its Southern Kurils.

Japan had proposed that its borders be expanded to include the islands.

Russia is proposing that an interim peace deal be struck that sidelines the territorial dispute for now.

However, Japan is keen to continue improving relations in the hope that they will lead to Russian concessions at a later stage.

Dispute facts
Occupied by Soviet troops in the dying days of World War II
Japan and the Soviet Union restored diplomatic relations in 1956, but a formal peace treaty was never signed because of the dispute
The islands have rich fishing grounds
Controlling the islands gives Russia access to the Pacific Ocean

The BBC's Charles Scanlon in Tokyo says few now believe that the 2000 deadline for signing a peace deal can be met.

Trade

Russia and Japan on Monday signed a document aimed at promoting joint economic co-operation in the Kurils.

On wider trade concerns, Russian reports say that Mr Mori warned Mr Putin that Japanese investors were wary of doing business in Russia.

Tokyo has often complained in the past of corruption, a shaky legal framework and heavy, often contradictory tax rules.

Mr Putin is to meet senior Japanese lawmakers, including ex-prime minister Yasuhiro Nakasone, later on Tuesday and will visit a judo gymnasium before flying to New York on Tuesday evening to attend the United Nations' millennium summit.

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See also:

04 Sep 00 | Asia-Pacific
Putin rejects Kuril agreement with Japan
03 Sep 00 | Asia-Pacific
Putin confronts Kurils dispute
30 Apr 00 | Asia-Pacific
Japan gives priority to Russia
21 Apr 00 | Asia-Pacific
Russian navy fires on Japanese boat
12 Nov 98 | Asia-Pacific
Relations thaw over Kuril Islands
05 Sep 00 | Asia-Pacific
Putin takes a tumble
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