Prime Minister Shinzo Abe said on Monday that he hopes for progress in peace treaty talks with Russia but that the decades-old issue cannot be settled in one meeting.

Abe said he wants to discuss the issue candidly with Russian President Vladimir Putin when he visits Japan on Dec. 15 and 16.

Abe has been betting that his relatively close ties with Putin and the lure of Japanese investment in fields such as medical technology and energy could ease progress in the dispute over four islands seized by Russia at the end of World War II.

The decades-old feud over the Russian-held, Japanese-claimed islands off Hokkaido has kept Tokyo and Moscow from signing a peace treaty formally ending their conflict and strengthening ties in the face of a rising China.

“This is not an issue that can be resolved in just one meeting,” Abe told a meeting of government and ruling party officials.

“I want us two leaders to discuss this frankly and with open minds and make progress in negotiations on a peace treaty,” said Abe, who has met Putin more than a dozen times since his first term in office between 2006 and 2007.

Russian Foreign Minister Sergey Lavrov said over the weekend it would be difficult to close the gap in positions over a peace treaty and the territorial dispute.

Meanwhile, sources close to the matter said Sunday Japan and Russia have decided to create a ¥100 billion ($880 million) fund with the aim of promoting economic cooperation.

The planned fund will be set up probably next year, with the Japan Bank for International Cooperation and the Russian Direct Investment Fund splitting the capital, the sources said.

The fund will be aimed at providing aid for Japanese companies to make inroads into Russia by investing in such fields as urban development and cutting-edge medicine mainly in the country’s Far East region, according to the sources.

Tokyo and Moscow are expected to reach an agreement over the launch of the fund during Putin’s trip to Japan, they added.

Japan and Russia have proceeded with an eight-point plan proposed by Abe in May that includes 30 priority projects involving private companies.

As major Japanese commercial banks remain cautious about investment in the projects, the two countries aim to support Japanese firms via the fund.

In the field of medicine, opening outpatient rehabilitation centers and establishing hospitals with state-of-the-art medical care including for cancer treatment are among the items under consideration for investment, the sources said.

The National Center for Geriatrics and Gerontology and the National Center for Child Health and Development are expected to take part in the projects.

Regarding urban development, projects including roads, modernizing postal deliveries and waste processing systems are eyed in the southern city of Voronezh and the Russian Far East port city of Vladivostok.

To attract more Japanese firms, the JBIC also plans to tap into a scheme which was agreed with local organizations in September to bring more investment into the special economic zone in the Far East region.