The ruling Liberal Democratic Party and New Komeito agreed Friday to form a basic agreement on five key policy areas by the end of the month, taking another step toward a tripartite alliance, officials of the two parties said.

Yukihiko Ikeda, LDP policy affairs chief, met with his New Komeito counterpart, Chikara Sakaguchi, at the Diet building to launch policy talks toward the alliance.

The LDP and its junior coalition partner, the Liberal Party, had agreed with New Komeito earlier to form a tripartite coalition if they could agree on policy.

However, with the Liberal Party absent from Friday's talks, it appears there will be a long way to go before the three-way alliance takes shape.

During Friday's meeting, officials said Ikeda and Sakaguchi agreed to map out common policies in five areas -- the economy, security, social security, environment and education.

They also confirmed that the two parties will discuss other areas, such as privacy, decentralization, administrative reform and human rights issues.

Concerning the thorny issue of reducing the number of Lower House seats, the two agreed to continue the talks at the secretary general level.

During the last Diet session, which ended Aug. 13, the LDP and the Liberal Party reached a compromise agreement on the dispute over a bill that would cut 50 Lower House seats elected through proportional representation. The agreement effectively means that resolution of the issue will be postponed until the next Diet session.

While the Liberal Party is a staunch proponent of the bill, New Komeito is vehemently opposed to it.

"It would have been more desirable if we could hold policy talks among all the three parties," Sakaguchi told reporters after his meeting with Ikeda. "But we've decided to hold policy discussions between us and the LDP, which represents the current coalition. And the LDP will serve as a bridge to pass information on to the Liberal Party every time we reach a certain agreement."

Ikeda and Sakaguchi will meet again Monday to enter full-scale negotiations on economic and security issues.