Russian President Vladimir Putin held talks with Japanese Prime Minister Shinzo Abe on Thursday focusing on a decades-old territorial dispute and a post-war peace treaty.

Russian President Vladimir Putin (L) shakes hands with Japanese Prime Minister Shinzo Abe prior to their meeting in Nagato, Yamaguchi prefecture, Japan, Dec. 15, 2016. Russian President Vladimir Putin held talks with Japanese Prime Minister Shinzo Abe here on Thursday focusing on a decades-old territorial dispute and a post-war peace treaty. [Xinhua]

Abe told reporters after a three-hour summit with Putin that he had a "candid and in-depth" discussion with Putin and they discussed free visits of Japanese ex-residents to and joint economic activities in four disputed islands in the Pacific.

Yuri Ushakov, an aide to Putin, told media that the two sides agreed to start consultations on conditions of joint economic activities over the four Pacific islands, though stressing that the activities should be conducted under Russian jurisdiction.

Russia suggested joint economic activities to Japan on the disputed islands in November, but some analysts here have been concerned that if Japan accepts the suggestion, it would mean a big step towards Moscow by recognizing Russian control of the Islands.

Japan has hoped to open a door for making breakthrough on dispute over the four Pacific islands held by Russia but claimed by Japan through the Abe-Putin summit.

Earlier in the day, Abe told reporters before departing for Nagato that he hopes to "spend time to negotiate in a quiet atmosphere at night."

Abe also showed his determination to resolve the issue by visiting and praying before his father's grave while waiting for Putin's arrival which was delayed for over two and a half hours, according to local media reports.

Abe's father Shintaro Abe, former foreign minister, was known for pushing for resolution of the territorial dispute.

However, despite Japan's efforts to lure Russia to cave in with economic cooperation and Japanese investment, it is widely believed that prospects of solving the dispute are slim, as differences are hard to iron out.

"I hope the meeting could be productive for the Russian-Japan relations, but it will be very difficult to solve territorial issues," a Russian national here told Xinhua earlier, saying that it is an issue concerning national interests.

Russia and Japan have not signed a peace treaty formalizing the end of World War Two mainly due to a territory row over four small islands in the Pacific which are called the Northern Territories in Japan and the Southern Kurils in Russia.

Japan maintains that the four Pacific islands are its inherent territory and that Russia illegally occupied them after Japan's surrender in WWII, while Russia, for its part, says the seizure was legitimate and urges Japan to recognize the outcome of the war.

Putin told Japanese media on Tuesday that there is no territorial issue between Russia and Japan over the four islands. "We believe we have no territorial problems at all. It is only Japan that believes it has territorial problems with Russia. We are ready to talk about this," Putin said.

Putin, whose visit was initially eyed in 2014 but postponed due to deterioration of bilateral ties following the Ukraine crisis, is the first Russian president to travel to Japan for a bilateral meeting in 11 years.