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Japan and Russia began negotiations Monday in Tokyo on sovereignty over Russian-held islands off Hokkaido but failed to narrow their differences, making a peace treaty, the conclusion of which has been targeted for year’s end, appear as distant as ever.

Two days of summit talks between Prime Minister Yoshiro Mori and visiting Russian President Vladimir Putin began Monday morning at the Government Guesthouse in Akasaka.

Although details of the morning negotiations were not released, a Foreign Ministry official quoted Putin as saying Russia will abide by its past agreements with Japan, including the 1956 Japan-Soviet Joint Declaration, which stated the return to Japan of the Habomai islets and Shikotan — two of the disputed territories.

It was the first time the Russian side recognized the 1956 agreement in bilateral territorial negotiations.

In the afternoon, the two leaders focused on bilateral economic cooperation and international issues. They did not touch on the territorial dispute but agreed to discuss the issue this morning on a “one-on-one” basis just between themselves and interpreters.

Monday’s meeting took place amid growing concern that the yearend deadline will be unfeasible if the two sides continue to stick to their positions on the border issue.

The Tokyo-Moscow row centers on four territories off Hokkaido seized by Soviet troops at the end of World War II. The territories are known in Japan as Etorofu, Kunashiri and Shikotan islands and the Habomai islets. Russia calls the territories the Southern Kuril Islands.

During the morning session, the two sides are believed to remain split on their approaches to resolve the dispute.

Japan again tabled its plan presented at the April 1998 bilateral summit in Kawana, Shizuoka Prefecture, between then Prime Minister Ryutaro Hashimoto and then Russian President Boris Yeltsin.

Mori explained to Putin the Kawana proposal to draw the demarcation line north of the disputed islands and conclude a peace treaty that would be acceptable to both sides, the official said.

The Kawana proposal designates the demarcation issue as inseparable from peace treaty talks, although it says the timing of the islands’ return should be left for later negotiations and that Russia’s administration of the islands will remain intact in the meantime.

Putin in turn told Mori that Russia’s plans do not completely match Japan’s but that he recognizes the problem’s existence and is ready to continue negotiations based on past agreements with Japan, the official said.

The president added that such agreements include the 1956 Japan-Soviet Joint Declaration, the 1993 Tokyo Declaration and the 1998 Moscow Declaration, the official said.

In the 1993 Tokyo Declaration, the two countries agreed to try to resolve the territorial row and sign a peace treaty based on the principles of law and justice, while the 1998 Moscow Declaration confirmed the two countries’ resolve to tackle the issue based on the 1997 Krasnoyarsk agreement, which set 2000 as a target to reach agreement.

During Monday’s talks, the Russian side is believed to have called for separating the demarcation talks from peace treaty negotiations, based on its proposal at the November 1998 meeting in Moscow between the late Prime Minister Keizo Obuchi and Yeltsin.

According to Moscow’s proposal, the two countries should sign an interim “treaty of peace and amity” this year and confirm their continued resolve to tackle the border issue.

Mori is believed to have expressed reluctance toward accepting the suggestion, which would effectively shelve the demarcation issue. In the afternoon session, Putin expressed Russia’s desire to jointly generate electricity and develop natural gas in Sakhalin in a variety of projects, such as building pipelines from Sakhalin to Japan.

Mori expressed Japan’s willingness to expand economic ties with Russia, but suggested that Russia fully consult with the business community in Japan on the matter, saying that feasibility of such projects should be judged by the private-sector, the official said.

Mori and Putin hailed a new, broad-based economic cooperation program which follows the 1997 Hashimoto-Yeltsin Plan. Its draft version, agreed last week in Tokyo by the two sides, is expected to be signed by the two leaders today.

Regarding Japan’s investment in Russia, Mori expressed Tokyo’s concern that Russia’s investment environment is not suitable for Japanese investors, citing an example of a failed joint venture in the Russian Far East.

He also conveyed Japan’s concern over a delay in disbursing loans to finance two pending Russian projects due to Moscow’s failure to satisfy the conditions for loan disbursement.

Putin stressed that his government is making efforts to improve the present situation.

Meanwhile, the two leaders agreed to enhance bilateral security cooperation, with Mori saying that a Tokyo-Moscow security partnership will be a vital factor in ensuring security in the Asia-Pacific in the next century.

Regarding international issues, Mori and Putin exchanged views on the situation on the Korean Peninsula.

Mori explained to Putin Japan’s efforts to improve relations with North Korea, citing a recent round of normalization negotiations held in Japan, the official said.

Putin expressed Russia’s encouragement toward Japan’s efforts, saying the international community should further engage North Korea in the framework of global cooperation, the official said.

The two leaders also discussed United Nations reform and nuclear nonproliferation centering on India and Pakistan.

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