Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe vowed yesterday to work toward a peace agreement between the countries to end a row that has festered since World War II.

Both said they would renew efforts to strike a deal on the disputed Kuril islands, which lie between the two countries.

"I assure you that Russia is interested in finding the sort of resolution that will let us conclude a peace agreement," Putin said at talks with Abe on the sidelines of an Asia-Pacific summit in Sydney.

"I am sure that Russia will continue this work not only this year, but next, after parliamentary and presidential election are held," Putin said.

Russia will hold a parliamentary poll in December, followed by a presidential election in March 2008, when Putin will step down at the end of his second term.

Abe backed the call. "It is necessary to sign a peace treaty if we want to shift (relations) to a new phase," he told Putin, according to a Japanese official.

Speaking through an interpreter, Abe said the two would also work to hammer out "the initiative to strengthen Russian-Japanese cooperation in East Siberia and the Far East" that Japan has proposed as a confidence-building measure.

Abe first offered in June to lend a hand in Russia's multi-billion-dollar plan to revive the resource-rich but sparsely populated region by providing energy technology and help on tourism, environmental and securityissues.

Sixty years after World War II, the two countries continue to dispute ownership over the Kuril Islands, which Soviet troops held onto after World War II and Japan refers to as the Northern Territory.

Russian Foreign Minister Sergei Lavrov is due to visit Japan in October to continue negotiations over the dispute, which has thus far prevented the two sides from concluding a post-World War II peace treaty.