Kazuo Kodama, spokesman for Japanese Foreign Minister Masahiko Komura, said after talks with Russian counterpart Sergei Lavrov in Moscow that 'both Japan and Russia agreed to conduct even more serious consultations and negotiations'.

'In the end, our two foreign ministers agreed that with respect to peace treaty negotiations, first and foremost the territorial issue must be resolved,' he told a news briefing.

Quoting directly what Mr Komura told Mr Lavrov, Mr Kodama said: 'We adopted a Japanese-Russian action plan in January 2003. ... In October, when I met Your Excellency, I emphasised that the continued discussion is not enough. We've got to make tangible progress.' 'In the end, the two ministers agreed to continue even more seriously this discussion,' Mr Kodama said.

Earlier on Monday Mr Lavrov said after meeting Komura finding a solution to the territorial dispute 'assumes intensive, patient work, work which will take into account, in full, the complexity of this problem and the mood in Russian and Japanese societies.' 'It will take time, but the resolve to find a solution exists on both sides,' Mr Lavrov told a news conference.

'We agreed to further continue a serious dialogue, serious negotiations with the aim of finding a final and mutually acceptable solution to this problem.'

Missile disagreement

Diplomatic sources in Tokyo said Mr Komura was in Moscow to prepare the ground for a possible meeting between Russian President Vladimir Putin, who steps down next month, and Japanese Prime Minister Yasuo Fukuda.

The islands in dispute are in the Kuril chain between Japan's northern island of Hokkaido and Russia's far eastern Kamchatka Peninsula. The closest is just 15 km from Hokkaido, which will host this year's Group of Eight summit.

The islands were seized by the Soviet Union after it declared war on Japan on Aug 8, 1945, just a week before Japan surrendered, sending about 17,000 Japanese fleeing. Neither side accepts the other's sovereignty over the islands.

Trade between Russia and Japan was worth US$21.2 billion (S$28.8 billion) in 2007, a five-fold increase since 2002. Major investors include carmaker Toyota, which last year opened its first Russian plant.

But signalling a new difference with Moscow, Mr Komura defended Japan's cooperation with the United States on a planned missile defence shield. Moscow opposes the plan - and a similar system in eastern Europe - saying it is a threat to Russian security.

'This is something Japan has been forced to do, taking into account the situation of Japan and the fact North Korea has conducted nuclear testing. I want to underline that this is in no way directed against Russia,' said Mr Komura.

Mr Lavrov disagreed: 'The best way to track and if necessary neutralise possible threats is the creation of a collective system ... which would unite the United States, Europe, Russia and any other interested countries including, of course, Japan.' -- REUTERS