UPDATE3: Noda, Putin agree to reactivate talks to resolve territorial row.

LOS CABOS, Mexico, June 18 Kyodo

(EDS: UPDATING WITH MORE INFO)

Japanese Prime Minister Yoshihiko Noda and Russian President Vladimir Putin agreed Monday to reactivate negotiations to resolve their countries' long-standing territorial dispute, arranging for Japanese Foreign Minister Koichiro Gemba to visit Moscow this summer.

"We agreed to reactivate the discussions on the territorial row," Noda told reporters ahead of the summit of the Group of 20 major economies in the Mexican resort of Los Cabos after his first face-to-face meeting with the Russian leader.

Based on a series of bilateral accords and documents as well as the principle of law and justice, the two sides also agreed to instruct their foreign ministries to hold substantive negotiations from now on in a quiet atmosphere, a Japanese official said.

In an apparent effort to touch on common ground between the two leaders, both holders of judo black belts, Noda told Putin that he wants to make their meeting the "hajime," or start, to move forward toward negotiations at ministerial and working levels, using the judo term for beginning a match.

Putin told Noda that Russia is basically ready to talk about the territorial issue with Japan, the official said, declining to elaborate.

"I held a meeting with Putin in a very warm atmosphere. I believe this meeting became the first step for me to build a relationship of trust,'' Noda said.

According to the Japanese official, Gemba's planned visit to Russia is aimed at discussing a range of bilateral issues, including the territorial dispute.

The dispute involving Japan's claim to four Russian-held islands off Hokkaido -- Etorofu, Kunashiri, Shikotan and the Habomai islet  group, which are known as the Northern Territories in Japan and as the Southern Kurils in Russia -- has prevented the two neighboring countries from concluding a postwar peace treaty.

Japan-Russia relations have soured since then Russian President Dmitry Medvedev visited Kunashiri Island in November 2010 amid protests from Japan.

Despite the agreement to spur the stalled negotiations over the territorial dispute by the two leaders, however, it remains uncertain whether Tokyo and Moscow will reach any breakthrough as both sides have stuck to their basic positions on the matter.

On the economic front, Noda and Putin agreed to cooperate to promote the construction of a liquefied natural gas plant in the Russian Far East city of Vladivostok as well as oil and natural gas development projects off Sakhalin, the official said.

During the 30-minute talks, Putin expressed expectations for greater investment from Japan, saying the level of Japanese investment remains small given the potential of the two countries' economies.

Noda and Putin also confirmed the importance of promoting people-to-people, parliamentary and cultural exchanges, the official added.