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After a discussion that lasted one-and-a-half hours, Mr Putin and Mr Koizumi continued their talks with the participation of the Russian and Japanese delegations.

Presidential Aide Sergei Prikhodko, Industry and Energy Minister Viktor Khristenko, Communications Minister Leonid Reiman, Governor of Primorye Region Sergei Darkin, Governor of Sakhalin Region Ivan Malakhov, Mayor of Moscow Yury Luzhkov, Director of the Federal Tourism Agency Vladimir Strzhalkovsky and other members of the delegation took part in the talks on the Russian side.

Japan was represented at the talks by Foreign Minister Taro Aso, Economy, Trade and Industry Minister Toshihiro Nikai, Special Aide to the Prime Minister Koro Besse and Director of the Natural Resources and Energy Agency Kodaira Nobueri.

The talks concluded with the signing of a package of 18 agreements on economic, humanitarian and security cooperation and cooperation in other areas.

Mr Putin and Mr Koizumi made press statements and answered journalists’ questions.

The main issues raised at the press conference were the development of bilateral trade and economic relations and an investment partnership, the conclusion of a peace treaty and the question of the Kuril Islands.

Mr Putin said that the desire to find a mutually acceptable solution to the Kuril Islands issue was clear on both sides during the talks.

The President invited Mr Koizumi to make an official visit to Russia in 2006.

A dinner was held at the Japanese Prime Minister’s residence in the evening in honour of Mr Putin.

The Russian and Japanese leaders exchanged gifts. Mr Putin presented Mr Koizumi with a painting by Sergei Andriyaki called ‘View of the Moscow River’, and Mr Koizumi gave Mr Putin a model of the schooner Heda, built in the nineteenth century by the sailors of Russian Admiral Yevfimy Putyatin.