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Leaders signal no resolution on island dispute

"It would be naive to think we can solve this problem in an hour," Putin said at a joint press conference with Abe.

Russian President Vladimir Putin (L) and Japanese Prime Minister Shinzo Abe end a two-day summit with no deal over disputed islands

Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe held talks in Abe's ancestral hometown and in Tokyo, in the latest attempt to secure a deal.

"There must be an end to this historic ping-pong," he said. "The fundamental interests of Russia and Japan require a long-term deal."

Abe concurred, but said the effort would continue despite the "difficult path ahead".

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"Concluding a peace treaty that has not been concluded in more than 70 years is not easy," Abe said.

"But we cannot resolve this issue only by asserting the correctness of each other's claims."

The Soviet Union seized four islands off Japan's northern coast in 1945 in the closing days of the war.

The dispute over the islands, known as the Southern Kurils in Russia and the Northern Territories in Japan, has prevented the two sides from fully putting the conflict behind them.

Abe has looked to win concessions by dangling the prospect of major Japanese investment in front of Moscow, which is mired in an economic crisis made worse by falling oil prices and Western sanctions over Crimea and Ukraine.

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Before they spoke, the two leaders oversaw a flurry of deal signings by their governments and businesses and agreed to begin negotiations towards possible economic cooperation in the disputed islands.

Abe said they had agreed on "more than 60 projects" in economic-related sectors.

"I believe there are a wide range of areas where Japan and Russia have not exercised our fullest potential, despite the fact that we are neighbouring nations," he said.

'Security issues'

Putin said business ties were a way to build confidence.

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"Our work together on the economic front will help us create a foundation to improve relations," he said.

The total contribution from Japan in terms of loans and investment was valued at about 300 billion yen ($2.5 billion), Kyodo News reported, citing Deputy Chief Cabinet Secretary Kotaro Nogami.

Despite any largesse from Tokyo, few believe Putin is likely to hand the islands back, not least because of their strategic value sitting astride the entrance to the Sea of Okhotsk.

"There are security issues," Putin said. "We have two naval bases in Vladivostok, from where our ships go out to the Pacific.

"We'd like the Japanese side to take all these concerns into account."

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Abe had tried to create a warm atmosphere for the talks, encouraging Putin to sample hot springs in his hometown and accompanying the accomplished judoist to a demonstration of the sport in Tokyo.

Despite Abe's efforts, Putin clearly bested him, said Itsuro Nakamura, professor of Russian politics at the University of Tsukuba.

"Putin pocketed a lot of souvenirs and lost nothing at all during the trip," Nakamura told AFP. "There was no progress on the territorial issue.

"Ahead of elections in Russia, Putin will never compromise on it."

Putin has not yet confirmed his candidacy but is widely expected to run for a fourth term in March 2018.

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