Japan and South Korea sailed into a territorial dispute Thursday when a South Korean fishing vessel veered into disputed waters in the Sea of Japan (also known as the East China Sea).

Japan's Coast Guard said that it arrested the captain of the vessel after it refused to stop for inspection in territory that Japan claims, near rocky islets long claimed by both countries.

In the past, disputes surrounding the islets – known in Korea as Dokdo, and in Japan as Takeshima – have led to spats in the diplomatic arena and protests on the streets of Seoul. Both Japan and South Korea are playing down this incident, but the fact that it occurred relatively close to South Korea's shores has observers worried that this could escalate into an untimely feud capable of overshadowing amicable military talks aimed at tightening ties between the two countries.

"I think it is very important that they work this out if they want to sign the [military] agreement," says Mingi Hyun, a research fellow at the Korea Institute for Maritime Strategy. "It is important that they are able to resolve this issue without much friction."

In Japan, he says, the claims over the islets do not seem to be a particularly passionate argument. "But in Korea it is," he explains. "The fact the incident happened near that territory is certainly not helpful."

The disputed rocky outcrop, located 87 kilometers (54 miles) from the South Korean mainland, was claimed by the Japanese in 1905, five years before the Japanese government officially annexed the then-unified Korean peninsula.

Calling the islets Takeshima, the Japanese claims to Dokdo are an emotive subject in South Korea and a lasting reminder of the bitterly remembered 35 years of colonial life under Japan. The South says its claim to the outcrop goes back centuries. Today, they are manned by a South Korean police unit.

Last year, Japanese patrol boats were involved in another maritime clash with a Chinese fishing boat that lit the torch paper in a territorial dispute with China.

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