Prime Minister Shinzo Abe has given up on reaching a broad agreement on a Japan-Russia peace treaty when he meets with President Vladimir Putin in June amid persisting differences over how to settle a longstanding territorial dispute, a government source said Thursday.

Instead, the two leaders may agree on visa-free travel between the Russian region where four disputed islands are located and Hokkaido, Japan's northernmost main island, when they meet on the sidelines of a Group of 20 summit in Osaka, the source said.

Abe had been hoping to secure a promise from Putin to hand over two of the islands, known in Japan as the Northern Territories and in Russia as the Southern Kurils.

(Collage of photos showing Abe, Putin, and the Habomai islets)

But with the chances of an immediate breakthrough looking slim, Abe has opted to revert to his earlier strategy of conducting joint economic activities with Russia on the islands while the countries continue negotiations, the source said.

The islands off eastern Hokkaido were seized by the Soviet Union after Japan's 1945 surrender brought an end to World War II. Japan has opposed Russia's position that it legitimately acquired the islands as a result of the war.

Putin has voiced concern that returning the two smaller islands -- Shikotan and the Habomai islet group -- would clear the way for the United States, Japan's largest security ally, to deploy troops to the region.

Japan, meanwhile, has rebuffed Russia's demand for recognition of its current sovereignty of the four islands as a condition for signing a peace treaty.

With such a wide rift in the negotiations, a senior Japanese official said, "It's unlikely that we'll have some kind of agreement at the G-20 summit."

The countries are instead considering the establishment of a system of visa-free travel between Sakhalin in Russia's Far East and Hokkaido, a move Russian Foreign Minister Sergey Lavrov proposed in January in a meeting with his Japanese counterpart Taro Kono.

Kono is planning to visit Moscow in mid-May to continue talks with Lavrov, with the two slated to meet again later in that month. Japan hopes that by holding the meetings in quick succession, the countries can keep the momentum in the negotiations going.

Abe has been widely seen as eager to secure a political legacy by resolving the territorial dispute and signing a peace treaty with Russia during his final term in office through September 2021.

He agreed with Putin in November to accelerate the talks based on the 1956 joint declaration that mentions the return of Shikotan and Habomai once a peace treaty is concluded.

The Northern Territories cover about 5,000 square kilometers and adjacent waters contain rich fishing grounds. Nearly 17,000 Russians reside on the islands of Kunashiri, Etorofu and Shikotan, while the Habomai islet group is uninhabited.

Shikotan and the Habomai group account for only 7 percent of the total landmass of the disputed islands.

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