Prime Minister Shinzo Abe and Russian President Vladimir Putin are set to approve joint economic activities on disputed islands off Hokkaido when they meet on Thursday, a diplomatic source said.

In their talks in the eastern Russian city of Vladivostok, the leaders are likely to sign off on joint projects in five areas — aquaculture, greenhouse farming, tourism, wind power and waste reduction, the source said Wednesday.

"I hope to make progress on the peace treaty issue by realizing joint economic activities that have been promoted and free visits by former Japanese residents" to the islands, Abe said before he left Tokyo.