Russian president Vladimir Putin and Japanese prime minister Shinzo Abe have discussed joint economic projects on disputed islands which could pave the way for the countries to finally sign a peace treaty.
Japan and Russia both claim four islands north of Japan's island of Hokkaido which came under Russian control at the end of the Second World War.
Thursday's meeting in Moscow is the third between the leaders in the past seven months; Mr Putin made a state visit to Japan in December, while Mr Abe met Putin in Russia's Far East in September.
The recent meetings are widely regarded as a sign that both Moscow and Tokyo are eager to settle the dispute over the Kuril islands and sign a peace treaty which the then-Soviet Union and Japan never managed to negotiate.
Mr Putin and Mr Abe told reporters after the talks at the Kremlin that a group of Japanese officials and businessmen would travel to the Kurils next month to examine opportunities for Japanese investment.
Mr Abe told reporters that he read out to Mr Putin during his visit in December letters from Japanese people who grew up in the Kurils and wanted to visit the graves of their loved ones.
Mr Putin said he would send a plane to Japan to take those who want to visit the graves, a move he hopes "will contribute to creating an atmosphere of trust and understanding between our nations".
Neither Mr Putin nor Mr Abe, however, indicated any progress on the talks to sign the peace treaty.
Mr Putin's spokesman Dmitry Peskov said "the territorial dispute needs to be settled somehow in a way that it will be suitable both for Moscow and Tokyo", but added that Russia and Japan would be working to boost economic co-operation no matter when the treaty is signed.
The countries also discussed the joint development of fisheries, tourism and other areas which might help bridge the gap.
In Tokyo, Japanese officials also expected Mr Abe to discuss North Korea with Mr Putin.
At recent talks, Japan, the US, South Korea and Australia agreed that China and Russia are crucial in pressuring North Korea to end its nuclear and missile programmes.
Mr Putin told reporters that he and Mr Abe are urging all parties involved in the Korea crisis to show restraint but did not elaborate.
The Russian leader's foreign policy aide Yuri Ushakov told Russian news agencies at the end of the talks that Mr Putin and Mr Abe did not discuss what could be done to get North Korea to drop its nuclear programme.