Moscow  - Russia and Japan sought Saturday to strengthen bilateral relations despite a row over the Kuril Islands, reports said.

Russian President Vladimir Putin, speaking at his residence in Novo-Ogayovo near Moscow where he conferred with Japanese Prime Minister Yasuo Fukuda, said: "In the past two years or three years, we have managed to improve Russian-Japanese relations," Interfax news agency reported.

Fukuda came out in favour of "personal and confidential contacts" to Russia and said both countries had to undertake joint efforts towards stability and development in the entire Asian-Pacific region.

Fukuda was in Moscow in to seek cooperation for the Group of Eight (G8) summit to be held on the northern Japanese island of Hokkaido from July 7 to 9.

The outgoing Russian president came out in favour of closer economic and political cooperation with Japan, noting: "Our relations are stable." The volume of trade and economic relations had increased fivefold since 2003.

Russia hopes for a Japanese contribution to development in eastern Siberia and help in boosting energy efficiency while Japan is eyeing oil supplies from Russia to decrease its reliance on Middle East resources.

"More and more Japanese companies are investing in the Russian economy and are building factories and companies," Putin added.

Russian-Japanese relations have been overshadowed by the disputed Kuril Islands for decades, preventing the conclusion of a peace treaty to formally end World War II hostilities.

Fukuda had earlier vowed to negotiate the handover of the islands in a "stronger" manner than past Japanese administrations.

But no major agreements on the territorial dispute were expected to be reached at the Moscow talks, government officials were quoted as saying.

Fukuda is scheduled to return to Japan Saturday night. (dpa)