Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe confirmed Friday they will build a joint economic development plan for the disputed Kuril chain.
"We want to manage the Kuril Islands together," said President Putin, saying the two nations intended to improve access to the disputed territories and work together to develop joint economic projects.
However, he said economic activity wasn't the only required cooperative action for the two nations. "The most important thing is a peace treaty," he said.
Prime Minister Abe said while the two leaders had differing opinions, it was necessary to forge a compromise.
"As long as we're insisting on our own points, we won't be able to solve this dispute. What we have to do is usher in a new age for the future generations," he said a joint press conference.
Abe also told reporters he was struck by conversations he'd had with the islanders.
"They want to make these islands a place of cohabitation and cooperation," he said.
"We don't have peace treaty after the war for 71 years and it is an abnormal situation."
The Kuril Islands are a little known chain of islands off Japan's northern coast.
Four of the islands, Iturup, Kunashir, Shikotan and Habomai, were seized by the then-Soviet Union three days after Japan's surrender at the end of World War II, giving them complete control of the Kuril chain.
Japan still considers those four islands part of its territory, a sore spot in relations between the two countries for the past 71 years.
The dispute was high on the agenda for Putin's first official visit to Japan in over a decade with both Moscow and Tokyo looking to enhance their security and economic interests in the Pacific.
"We might have existed without close relations up until now, but by working together, our competitive force will increase several times," said Putin.