Speaking in Moscow, Mr Obuchi said he wanted to open "a new chapter" in relations between Russia and Japan.

He said he hoped Moscow would give a favourable response to Japanese claims over a group of islands to the north of Japan which the Soviet Union seized at the end of the Second World War.

The disputed ownership of the Kurile islands and their rich fishing waters has meant the two sides have been unable to conclude a formal peace treaty, ending the war between them.

Trade and investment also remains blocked over the issue.

Nationalist pressure

Russia's desperate need for economic aid and cooperation has led to a thaw in relations between the two countries and both sides are now thought to be open to compromise.

That would help President Yeltsin, who is under intense pressure from nationalists and Communists not to concede anything.

Many Russians face increased hardship

The fact that Japan is offering $1.5bn in aid to help Russia deal with its economic crisis may help to smooth the path, although Japanese officials insist there is no linkage on the issue.

Mr Obuchi will cover both in talks on Thursday with President Yeltsin and the following day with Prime Minister Primakov - although with Mr Yeltsin's recent political and health difficulties many observers believe that the real business will be done at the latter meeting.

Before his departure Mr Obuchi said Japan wanted to enter a "period of all-round co-operation" with Russia

New relationship

"I will make every effort, since this is a good opportunity, to build a stable relationship between the two countries towards the 21st century," he said.

Last November, President Yeltsin and the then Japanese Prime Minister, Ryutaro Hashimoto, agreed to try to sign a treaty by 2000.

Mr Yeltsin is expected to reply to a proposed Japanese resolution that Tokyo declare sovereignty over the islands but allows Russia to continue to administer them temporarily.