Prime Minister Junichiro Koizumi left Friday for a summit of the Asia-Pacific Economic Cooperation forum in Chile, where he will have to juggle a wide range of diplomatic issues that span the Pacific.

But Koizumi can breathe a small sigh of relief now that a meeting with Chinese President Hu Jintao has been officially set for Sunday on the sidelines of the APEC forum.

Speculation had been rife that the meeting might be scuttled after a Chinese nuclear submarine briefly intruded into Japan's territorial waters last week.

Koizumi told reporters before he left that he will discuss the incident during his talks with Hu, their first summit since October 2003, when they met on the sidelines of an APEC gathering in Bangkok.

"We should deal the matter so that the incident does not hamper development of the Japan-China relationship," Koizumi said.

The intrusion throws a shroud of uncertainty over the pair's meeting, which is already expected to be tense due to Koizumi's repeated visits to Tokyo's Yasukuni Shrine, which honors Japan's war dead as well as Class-A war criminals.

Not only will Koizumi try to improve ties with Beijing that have often been described as "politically cold, economically hot," but he will also meet with Russian President Vladimir Putin to discuss the dispute over the Russian-held islands of Kunashiri, Shikotan and Etorofu and the Habomai islets that lie off Hokkaido.

The talks will come less than a week after Putin hinted that Moscow is prepared to return two of the island group, based on a joint declaration signed in 1956.

Although Putin is expected to visit Tokyo early next year to discuss the row, Koizumi has repeatedly said Japan will only sign a peace treaty -- expected to boost bilateral relations -- once Russia recognizes Japan's sovereignty over all the islands.

On the economic front, Koizumi and his Chilean counterpart, Ricardo Lagos, are expected to agree to launch a joint study panel for a bilateral free-trade agreement at a meeting scheduled for Monday, as Tokyo continues its pursuit of FTAs with its trading partners.

Yet, the prime minister may find a moment of ease when he meets his close ally, U.S. President George W. Bush, in their first face-to-face encounter since Bush was re-elected earlier this month.