Building confidence and stepping up cooperation with Russia through high-level dialogue are the keys to resolving the long-standing territorial row over Russian-held islands off Hokkaido, according to Shunji Yanai, newly appointed foreign vice minister.

"Relations between Japan and Russia have become favorable compared with those in the past because of efforts (by the two sides) over the past several years, and discussions at the top level should be further strengthened," Yanai told a news conference on July 1.

Prime Minister Ryutaro Hashimoto and Russian President Boris Yeltsin agreed late last month to regular reciprocal visits and to set up a hot line between Tokyo and Moscow to improve bilateral relations. Hashimoto proposed they meet in the Russian Far East this year. He said that gaining the understanding of the Russian public on the territorial issue is also important because the Russian people are not always aware there is a problem.