Japanese Prime Minister Yasuo Fukuda concluded his two-day visit to Russia on Saturday after talks with Russia's outgoing President Vladimir Putin and president-elect Dmitry Medvedev.

As Putin hailed Russian-Japanese political contacts, Fukuda, who was on his first trip to Russia as a prime minister, expressed his willingness to establish a good personal relationship with the Russian leaders.

The visit, labeled by Kremlin officials as "quite satisfactory on the whole," marked a fresh step by the two countries to promote bilateral ties amid difference on territorial claims, analysts say.

TERRITORIAL DISPUTE

Territorial dispute between Russia and Japan on four islands in the Pacific Ocean has long dampened ties between the two countries, which also blocked them from entering a peace treaty after the World War II.

The four islands, known as the Northern Territories in Japan and the Southern Kurils in Russia, were occupied by Soviet troops after the end of World War II and are currently under Russian control.

Russia has agreed to give up two of them but Japan insisted to take back all.

Fukuda said ahead of the visit that he would adopt a "stronger" manner in negotiating the matter with Moscow than past Japanese administrations, apparently aimed to boost his approval rating amid various domestic woes and a divided parliament.

The two sides avoided in-depth discussions on the issue during the Moscow talks, although Putin gestured Russia is willing to continue dialog on a peace treaty and create conditions for talks on the islands.

Moscow and Tokyo are moving in the right direction on the disputed territories, Itar-Tass quoted Putin as saying.

Putin and Fukuda agreed to re-address the issue, the Japanese Foreign Ministry's chief spokesman Kazuo Kodama said. But he added that Japan's position on the islands would remain unchanged no matter who assumes the Russian leadership.

EFFORTS TO BOOST COOPERATION

Even without a peace treaty, economic and trade contacts are intense between Russia and Japan, led by big oil and gas purchases made by energy-thirsty Japan from Russia, which boasts vast land with rich oil and gas reserves.

Russian-Japanese trade volume has risen five-fold since 2003, and the amount of Japanese investment in Russia is growing, Putin said during meeting with Fukuda.

The two leaders exchanged views on promoting bilateral cooperation and agreed to further cooperation in areas such as oil and gas, transportation and nuclear power, said Russian presidential spokesman Alexei Gromov.

Analysts said the two countries are interdependent as Russia is eager to get a Japanese contribution to develop its far eastern regions and improve its energy efficiency, and Japan needs oil supply to relief its energy dependence on the Middle East.

The two countries have inked agreements on the delivery of 8 million tons of liquidized natural gas to Japan per year within the framework of the Sakhalin-2 project, a big oil-and-gas exploration project in Russia's far east.

Furthermore, Putin and Fukuda vowed to enhance cooperation in the peaceful use of nuclear energy, the improvement of Russia's transport infrastructure, including the construction of high-speed railways.

INVITATION FOR G-8 SUMMIT

Another major purpose of Fukuda's visit is to make preparations for the Group of Eight summit to be held on July 7-9 in Hokkaido, Japan.

As this year's president of the developed nations' club, Fukuda has been seeking cooperation on key issues such as climate change and the layout of a post-2012 emissions cut framework.

President-elect Dmitry Medvedev, who will be inaugurated as president on May 7, is expected to be present at the summit and hold talks with Fukuda at bilateral talks.

Observers said that Fukuda has expected Russia to give him a support during the upcoming summit, which will be dominated by environment issues.

"In Russia, there are still many environmental problems that need to be addressed. Japan is ready to engage in technological cooperation in this field," Itar-Tass quoted Fukuda as saying.

(Xinhua News Agency April 27, 2008)