Russian President Vladimir Putin turned to Japanese Prime Minister Shinzo Abe on a conference stage on Wednesday and offered to sign a peace treaty by the end of this year to formally end World War Two hostilities between their countries.
But soon after Putin made the dramatic offer, a Japanese government spokesperson in Tokyo said Japan wanted the return of islands in the Pacific captured by Russian troops in the last days of the war before it signed a peace treaty.
Russia and Japan have been in dispute for seven decades over the islands and as a result have still not formally ended their World War Two hostilities. The standoff has held back economic ties between the two near-neighbours.
"An idea has just come into my head," Putin said to Abe during a question and answer session at an economic forum in the Russian city of Vladivostok.
"Let's conclude a peace treaty before the end of this year, without any pre-conditions."
Abe did not respond.
Later in the same session, Putin said of his offer: "I was not joking." He said his idea was that the two sides sign a treaty first, and then work through the issues on which they are in dispute afterwards.
Both Moscow and Tokyo claim sovereignty over the islands, known in Russia as the Kurile islands and in Japan as the Northern Territories.