Tokyo policy makers see a window of opportunity to resolve a territorial dispute between Japan and Russia over four small islands that has stunted bilateral relations for six decades, after an olive branch on the issue from Vladimir Putin and as the rise of China heightens the urgency for both countries to deepen ties.

Since Mr. Putin's return as Russia's president he has signaled a willingness to compromise with the World War II enemy and Tokyo has also acknowledged it may need to make its own concessions on the dispute, which has prevented the two countries from signing a peace treaty.

"At the end of the day, a political decision will have to be made," said Seiji Maehara, the policy chief of the ruling Democratic Party of Japan and a former foreign minister.

Japanese Prime Minister Yoshihiko Noda is gearing up to address the issue in a meeting with Mr. Putin, expected to be held this weekend in Russia's Far East city of Vladivostok on the sidelines of the Asia-Pacific Economic Cooperation summit.

At issue are four southern islands in the Kuril Island chain that the former Soviet Union took over during the final days of the war. Japan is demanding the return of all four islands, which it calls the Northern Territories, while Russia under a 1956 agreement has pledged to return only the smallest two.