Russia proposed to work with Japan to develop four disputed islands Friday--a move that could break the five-decade territorial impasse that has stymied relations between the two Pacific powers.
But the proposal by Russian Foreign Minister Yevgeny M. Primakov apparently did not signify any fundamental change in the conflicting assertions of sovereignty by both nations.
Russia seized the four islands--Etorofu, Kunashiri, Shikotan and the Habomai inlet group off the northern coast of Hokkaido--from Japan in the closing days of World War II.
"We need a new stimulus," Primakov told Japanese Foreign Minister Yukihiko Ikeda in proposing joint development of tourism, fisheries and transport industries.
In a reciprocal sign of thaw, Japan announced that it will extend to Russia a $500-million loan through the Export-Import Bank of Japan. It was the first resumption of aid since the 1991 collapse of the Soviet Union, when political instability prompted Japan to freeze assistance.
Ikeda told Primakov that Japan would study the development plan only if it did not lead to shelving the nations' territorial dispute. Russia has advocated strengthening economic, cultural and humanitarian ties to improve the climate for negotiations, while Japan has insisted that concrete talks over the territorial dispute take place at the same time.
The two sides also agreed to expand an earlier agreement for visa-free trips to the islands to give the Japanese a chance to visit ancestral graves there.
A Japanese official called Primakov's proposal a "serious offer" and said the government has begun studying it.
In an analysis, the Nihon Keizai Shimbun said Russia was probably angling for Japanese aid in rebuilding the islands, which were devastated by a 1994 earthquake.
The damage has led some residents to abandon the islands and has increased local discontent, the paper said.
"Japan needs to act with extreme caution to ensure that its claim to the four islands off Hokkaido, both from legal and historical standpoints, is not affected," the Yomiuri Shimbun said in an editorial.
Russian media cast the proposal as a step forward but stopped short of describing it as a breakthrough.
"This does not signify Russia's renunciation of its sovereign rights to the islands," Primakov told the quasi-official Itar-Tass news agency after meeting with Ikeda. "Neither do we insist that the Japanese side abandon its stand."
Strapped of the money needed to invest in the primitive islands--known in Russia as the Southern Kurils and in Japan as the Northern Territories--Moscow may be softening its line in the dispute in hopes of economic gain and an easing of tensions with Japan at a time when Russia badly needs its wealthy Asian neighbor's investment throughout the federation.
Primakov, who has quietly cut a swath through Russia's regional disputes in his short tenure, pointed to British-Argentine projects to develop the disputed Falkland Islands as a possible model for Moscow and Tokyo to follow.
Watanabe reported from Tokyo and Williams from Moscow.