TOKYO, Dec. 16 (Xinhua) -- Japan and Russia announced on Friday that the two sides will start consultations on joint economic activities on four Pacific islands held by Russia while claimed by Japan.

The joint activities would be conducted "under a special framework", the two sides agreed.

It will be an important step towards reaching a postwar peace treaty between the two countries, said a press statement here after the two leaders' meeting.

Russia and Japan have not signed a peace treaty formalizing the end of World War Two mainly due to a territory row over four small islands in the Pacific which are called the Northern Territories in Japan and the Southern Kurils in Russia.

Russia suggested joint economic activities to Japan on the disputed islands in November, but there have been some concerns in Japan that if Japan accepts the suggestion, it would mean a big step towards Moscow by recognizing Russia's control of the Islands.

Russian President Vladimir Putin is currently on a two-day visit to Japan for talks with Japanese Prime Minister Shinzo Abe on territorial issues as well as economic cooperation. Analysts here have pointed out that chances of solving the territorial dispute between the two countries are slim as differences are hard to iron out.