Japan and South Korea agreed Friday to continue close communication in a bid to resolve a dispute over wartime labor, according to the Japanese government.

Foreign Minister Yoshimasa Hayashi and his South Korean counterpart, Park Jin, pledged to restore healthy bilateral relations and further develop them by resolving the pending issue when they spoke over the phone, the Foreign Ministry said.

On Thursday, Seoul said it was considering a proposal for a South Korean foundation to compensate plaintiffs on behalf of Japanese corporate defendants that allegedly used forced labor during Japan's colonial rule of the Korean Peninsula, and saw it as the best possible option.

South Korea's Foreign Ministry revealed the plan at a public hearing in Seoul. Still, the plan faced harsh backlash from the plaintiffs and their supporters who want the Japanese side to pay the compensation and apologize.

The problem has contributed to the deterioration of bilateral ties to their lowest levels in decades. Japan maintains that all claims stemming from its colonial rule between 1910 and 1945 were settled "completely and finally" under a 1965 bilateral agreement.