UPDATE 2 - Abe, Putin say difficulties remain in island dispute

UPDATES TO LINK PHOTOS

TOKYO (AA) - Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin have reached an agreement to launch talks on joint economic activities on islands at the center of a 71-year territorial dispute.

A statement released after their talks in Tokyo on Friday said the leaders “reached a mutual understanding that starting talks on the joint economic activities by Japan and Russia... could be an important step" toward signing a peace treaty to formally end hostilities from World War II -- an effort that has been stalled by the island row.

Kyodo news agency also reported that the statement did not directly refer to the issue of the islands’ sovereignty and said both sides agreed that joint economic activities would not compromise either of their positions regarding a peace treaty.

The four islands in question -- Kunashiri, Etorofu, Shikotan and the Hobamai group -- are located north of Japan’s Hokkaido and were annexed by the Soviet army in the last days of WWII.

Russia maintains that sovereignty was recognized following agreements at the end of the war, however, Japan has disputed this claim -- simply seeing Moscow as having taken over the islands as war booty.

Abe and Putin stated at a joint press conference after their meeting Friday that difficulties remain in searching for a resolution to the dispute.

Putin said that while “the lack of a Japan-Russia peace treaty is a negative legacy of the past", the two sides should continue working toward finding a solution even though the island dispute “cannot be solved soon”.

According to the press statement, joint economic activities on the islands would involve the fishing, tourism, medical and environmental sectors.

Kyodo news agency cited a Japanese government source as saying that Tokyo would contribute 300 billion yen ($2.54 billion) to the Abe-proposed economic cooperation plan.

The Japanese government's top spokesman, Yoshihide Suga, said Friday morning that Abe’s discussion of joint activities on the islands was based on the condition that any move would not undermine Japan's legal stance on the issue.

Meanwhile, a Russian news agency quoted Putin spokesman Dmitry Sergeyevich as saying that Thursday’s talks did not involve the sovereignty issue.

Putin’s two-day visit, which concludes Friday, is the first by a Russian president in 11 years and his fourth meeting with Abe this year.

After the joint press conference, the leaders delivered speeches at an economic forum hosted by Japanese business lobby Keidanren and visited an institute of judo -- a martial art of which Putin is known to be an enthusiast.