Putin seeks 'compromise,' not 'trade' in Japan isle dispute

Vladimir Putin has said Russia is willing to compromise on a territorial dispute that has bedevilled relations with Japan for eight decades, but said this would not include the trade or sale of islands that it holds and Japan also claims.

“We’re not talking about some exchange or some sale," the Russian president told Bloomberg News in an interview on Thursday and posted on the news agency's website.

"We are talking about finding a solution where neither of the parties would feel defeated or a loser.”

Putin is to meet Japanese Prime Minister Shinzo Abe on Friday on the sidelines of a business conference in Vladivostok to discuss, among other things, closer economic cooperation in such areas as energy and technology.

Abe hopes the lure of deeper economic ties with Russia will strengthen strategic relations in the face of a rising China, but sceptics question whether the approach will generate a breakthrough on the dispute over the small islands.

Japanese officials could not immediately be reached for comment on Putin's remarks.

Abe, speaking to reporters in Tokyo before his departure for Vladivostok, said he hoped for progress in his talks with the Russian leader.

"I hope to have a heart-to-heart talk with President Putin to move forward on the issue of a peace treaty and the Northern Territories," Abe said, using the Japanese name for the islands.

Japanese trade minister Hiroshige Seko, newly put in charge of economic cooperation with Russia, told reporters separately he would meet Russian ministers in Vladivostok to discuss specific areas of cooperation and might reach some agreements.

The dispute over Moscow's seizure of the territory off Hokkaido - called the Southern Kuriles by Russia - in the final days of World War Two has prevented the two countries from signing a treaty formalising the end of the war.

“We don’t trade in territories, although the problem of a peace treaty with Japan is a key one," Putin said through an interpreter.

"And we would very much like to find a solution to this problem with our Japanese friends."