Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe will meet next month on the sidelines of a summit of world leaders in Japan.
Russian Foreign Minister Sergey Lavrov said Friday the two leaders agreed to discuss joint economic activities as a way to resolve a decades-long territorial dispute.
At issue is the sovereignty of four Russian-held western Pacific islands called the Northern Territories in Japan and Southern Kuriles in Russia.
The former Soviet Union seized the islands at the end of World War II, a move Tokyo claims was illegal. The seizure resulted in a long-running diplomatic dispute and created an obstacle to a peace treaty.
Lavrov, speaking to reporters after a meeting in Tokyo with Japanese counterpart Taro Kono, said progress had been made in talks with Japan on a handful of economic projects on the islands. He did not elaborate.
Abe had previously planned to negotiate the return of two of the smallest islands at the upcoming meeting, but decided instead to hold talks on joint economic activities on the islands as a trust-building exercise with hopes of eventually producing a peace treaty.
The two leaders will meet in Osaka on June 29, the last day of a two-day summit of the Group of 20 (G-20) nations, which represents "a mix of the world's largest advanced and emerging economies."