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"Our relations with Russia hold unlimited potential," Japan's Shinzo Abe said, speaking at the Eastern Economic Forum in Vladivostok, Russia Wednesday.
"Over the long stretch of more than 70 years since the end of World War II, Japan and Russia have yet to conclude a peace treaty between them. Both (President Vladimir) Putin and I agreed this is an abnormal state of affairs."
The peace deal relates to a dispute over a chain of Pacific islands since the time of World War II. Both countries have not signed a peace treaty since then.
Putin, also speaking at the same event Wednesday, pointed out that Russia and Japan's militaries are cooperating for the first time. The Russian leader told Abe that the two nations should pen a peace agreement this year.
"Let's conclude a peace treaty before the end of this year, without any pre-conditions," Putin told Abe at the forum, with the Japanese leader not giving a direct response.
Shortly after the statements were made, Japan's chief government spokesman issued a statement saying there would be no change to Japan's positioning on resolving the northern islands issue before signing a treaty with Russia.
The Eastern Economic forum, which covers economic development, cooperation and investment projects in northeast Asia and is now in its fourth year, attracted more than 6,000 attendees from over 60 countries.
The historical tension between the two countries centers around the Kuril Islands, known as the Northern Territories in Japan.
The Soviet Union seized the islands from Japan at the end of the war, and the dispute has remained so acrimonious that it's prevented a peace treaty between the two. In early 2018, Japan's Defense Ministry asked Russia to reduce its military activity on the islands after Moscow beefed up forces there, deploying warplanes in response to Japan's rollout of the U.S. Aegis missile system.
Talks have continued about resolving the dispute, despite Russia's deployment of its newest missile system to the islands and current plans to build a naval base there.
Abe spoke of Putin's visit to his hometown of Nagato, Japan in 2016, during which the leaders agreed to launch consultations for a system of joint economic activity on the four northern islands, including allowing residents to freely visit grave sites.
"There in Nagato we also shared an earnest determination toward resolving the issue of the peace treaty. These promises we made are now steadily starting to be carried out," Abe said, adding that "Japan-Russia relations are advancing at a degree never seen before."