Liberal Democratic Party Secretary General Hiromu Nonaka said Sunday it is impossible for Japan and Russia to conclude a peace treaty by the end of 2000, the deadline set in a 1997 bilateral agreement.

In a speech delivered at a Sapporo hotel, Nonaka spoke about the countries' territorial row over islands off Hokkaido that Soviet troops seized at the end of World War II, which has prevented the signing of a peace pact.

"With only two months remaining (to the deadline), (the agreement) is impossible to realize," Nonaka said.

In November 1997, then Prime Minister Ryutaro Hashimoto and then Russian President Boris Yeltsin agreed during an informal summit in Krasnoyarsk, eastern Siberia, to strive to resolve their territorial dispute and conclude a peace treaty by the end of 2000.

"We should negotiate with Russia by linking territorial issues, economic issues and a peace treaty as a package," Nonaka said.

He said an underwater tunnel should be dug between Nemuro, Hokkaido's easternmost city, and Kunashiri Island, one of the islands held by Russia and claimed by Japan. Another should be built to link Wakkanai, Japan's northernmost city, and Russia's Sakhalin Island.

With the tunnels, the two countries would be able to develop a rail system connecting Japan and Europe via Siberia, he said, adding that they would be more worthwhile in the long run than the three existing large bridges tying Honshu and Shikoku.