Prime Minister Shinzo Abe and Russian President Vladimir Putin agreed Thursday to continue negotiations to resolve a long-standing territorial dispute, eventually leading to the conclusion of a peace treaty, a Japanese official said.

Meeting on the sidelines of the Group of Eight summit in Heiligendamm, Germany, Putin welcomed as "appealing and constructive" an initiative submitted by Japan on cooperation in eight fields in the Russian Far East and Eastern Siberia.

"Without delaying and shelving the territorial issue, which must eventually be resolved, let's push forward with the negotiations," Abe was quoted as saying to Putin in reference to the sovereignty dispute over a set of Russian-held islands off Hokkaido.