Japan unilaterally broke a tentative agreement to hold brief talks between Prime Minister Yoshihide Suga and his South Korean counterpart Moon Jae In on the fringes of the Group of Seven summit in Britain, Yonhap News Agency reported Monday, while Japan dismissed the report as not factual.

Citing a South Korean Foreign Ministry official, the South Korean news agency said Japan called off the planned "pull-aside" meeting between the two leaders due to a regular military exercise South Korea is to hold around a group of islets claimed by Tokyo in the Sea of Japan.

Japanese Prime Minister Yoshihide Suga (C) waves after photos with the other Group of Seven leaders were taken in Cornwall, England, on June 11, 2021, with (from L to R) European Council President Charles Michel, U.S. President Joe Biden, British Prime Minister Boris Johnson, Italian Prime Minister Mario Draghi seen around Suga. (Pool photo) (Kyodo) ==Kyodo

South Korea plans to hold the defense drill on and around the islets on Tuesday, Yonhap reported. Japan calls them Takeshima and regards them as "an inherent part" of its territory. South Korea, which controls them, calls them Dokdo.

"We think it is regrettable that the Japanese side did not respond to the pull-aside plan, which the two sides had agreed on at a working level, due to the annual drills to safeguard the East Sea territory," the ministry official was quoted as saying, referring to the sea by the name South Korea uses for it.

The two leaders exchanged greetings while they were at the venue of the summit, according to Suga. They had not met in person since he became prime minister in September, reflecting the soured bilateral relationship over wartime labor compensation and other issues.

"My first encounter with Prime Minister Suga was a precious chance that could be a new start in South Korea-Japan relationship, but I am sorry that it could not develop into a meeting," Moon said in a Facebook post.

However, Japan's top government spokesman Katsunobu Kato denied the report Monday, saying "there is no such fact."

"Such a story that not only goes against the fact but is also one-sided is extremely regrettable, and we immediately lodged a protest," Kato said at a press conference, explaining that a bilateral summit was not held due to schedule issues.

He said Japan has also lodged a protest against South Korea on the scheduled drill on and around Takashima, saying the island is undoubtedly Japan's territory, from a historical perspective and based on international law.