Prime Minister Fumio Kishida urged South Korean President Moon Jae In Friday to take the initiative to resolve a bilateral spat over wartime compensation.

Speaking to reporters after their first phone talks since Kishida took office last week, the Japanese leader said he "strongly urged South Korea to take appropriate action" and that bilateral relations are in an "extremely difficult situation."

Moon told Kishida that it is "desirable to look for diplomatic solutions between the two countries" as the issue is "a problem over differences in legal interpretation" of how much is covered by a 1965 bilateral agreement that sought to settle issues related to property and claims stemming from the 1910-1945 Japanese colonial rule of the Korean Peninsula, according to Moon's office.