Japanese Prime Minister Shinzo Abe has hailed a potential breakthrough in a decades-long territorial dispute with Russia, after talks with President Vladimir Putin, Japan's foreign ministry spokesman said.

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"The prime minister said that today he could feel a breakthrough, he could make a breakthrough in the currently stagnated negotiation," Japanese foreign ministry press secretary Yasuhisa Kawamura said.

Tokyo-Moscow relations are hamstrung by a row dating back to the end of World War II when Soviet troops seized the four southernmost islands in the Pacific Kuril chain, known as the Northern Territories in Japan.

Japan and Russia's lingering tensions have prevented them ever signing a peace treaty to formally end World War II hostilities, hindering trade and investment ties.

Abe, in a rare visit by a G7 leader to Russia, met Putin for talks at his holiday residence in the Black Sea resort of Sochi with their talks focusing on the dispute.

"The prime minister said that Mr Putin also shared ... the same feeling" and the leaders "agreed today that they themselves directly get involved in the negotiation," Kawamura said.

Putin and Abe agreed to "promote negotiations by employing a new approach without being bothered by the old previous thinking," Kawamura said.

"This is literally a new element," he said, without giving more detail.

"Japan is not just our neighbour, it is a very important partner for us in the Asian-Pacific region," Putin told Abe at the start of the meeting.

"We have certain questions that demand special attention, maybe for this reason we must devote special attention to building relationships," the Russian leader added.

The Kremlin had dismissed hopes of any major breakthrough towards resolving the dispute at Friday's meeting, while playing up Abe's visit as a symbol of warming ties despite Western attempts to isolate Putin.

The leaders held talks lasting more than three hours, including a tete-a-tete section, in what Abe called "an extensive, frank and candid exchange of views," Kawamura said.

Both sides had earlier mooted the possibility of starting negotiations on signing a peace treaty, with Japanese Foreign Minister Fumio Kishida saying in April that they could begin "as soon as possible" after the leaders met.

Russian Foreign Minister Sergei Lavrov said briefly after the talks Friday that the sides "discussed the problem of the peace treaty," giving few details but announcing another round of foreign ministry consultations in June.