AKIPRESS.COM - Japanese Prime Minister Shinzo Abe and Russian President Vladimir Putin are set to witness the signing of a raft of business agreements in Tokyo on Friday, after agreeing the previous day to seek economic cooperation on disputed islands, Bloomberg reported.

In five hours of discussions at a hot-spring resort, the two leaders “talked about a special system for joint economic activity on the four islands and the peace treaty,” Abe told reporters Thursday in Nagato, southwestern Japan. Disagreement over sovereignty of the four islands -- known as the Northern Territories in Japan and the Southern Kurils in Russia -- has prevented the two countries from signing an official peace treaty for seven decades.

Putin and Abe ordered their officials to start detailed negotiations on the terms and format for economic cooperation on the islands, Kremlin foreign policy aide Yuri Ushakov told reporters after the talks. The joint plans in areas including medicine, tourism and fisheries will be implemented on the basis of Russian legislation because the islands belong to Russia, he said.

The 16th summit between the pair comes at a crucial time for both countries. Russia has been starved for investment and trade amid low oil prices, and international sanctions over its actions in Ukraine. Japan is on a quest to diversify energy sources, with its nuclear power industry hobbled by the aftermath of the 2011 Fukushima disaster.

The deals to be signed on Friday include a $1 billion joint fund to invest in Russian projects including energy and infrastructure over the next three to five years, Kirill Dmitriev, chief executive office for the Russian Direct Investment Fund, told Bloomberg.

Abe and Putin are scheduled to hold a press conference in Tokyo on Friday after a working lunch. Later in the day, they will attend a Russia-Japan business forum and Putin will visit a judo center in the capital.