Japan and Russia have signed a nuclear energy co-operation agreement during a visit to Tokyo by Russian Prime Minister Vladimir Putin.
The deal will enable the transfer of Japanese technology to Russia and the sale of more nuclear fuel to Japan.
Mr Putin and his counterpart, Taro Aso, also pledged to study "all options" to end a territorial dispute.
Both claim sovereignty over islands Japan calls the Northern Territories and Russia calls the Southern Kurils.
The BBC reports the four islands have been under Russian control since the end of World War II, and the issue has since prevented the two nations from signing a comprehensive peace treaty.
Mr Putin said that it was important that both countries developed "economic co-operation in order to create conditions for the signing of a peace treaty".
While president between 2000 and 2008, he refused to make any concessions over the islands.
The BBC reports the accord will also pave the way for joint mining and oil ventures, and commercial contracts worth billions of dollars.