By Hyun Oh

KUNASHIR, Kurile Islands (Reuters) - Russian residents of an island chain at the centre of a dispute between Japan and Russia that has held up a treaty to formally end World War Two hope a diplomatic solution will lure tourists and investment to help refurbish rickety infrastructure.

Ties have been soured since the waning days of the war, when Soviet forces seized the Pacific islands known in Russia as the Southern Kuriles, but which Japan calls the Northern Territories, and forced out 17,000 Japanese residents.

In an effort to improve relations and narrow differences over the dispute, Japanese Prime Minister Shinzo Abe plans to hold a summit meeting with Russian President Vladimir Putin on the sidelines of the U.N. General Assembly next Monday.

"We need to attract people to this island," said Gennady Berezyuk, a 63-year-old freelance journalist who lives on Kunashir island, known in Japan as Kunashiri. "We need to build, if not Disneyland, then something that will make people come."

Japan calls the island dispute a barrier to closer economic ties. Despite that, trade and investment between the two countries have grown as Japanese firms invest in the resource-rich Russian Far East, although not on the disputed islands.

"We invited Japanese to invest here to create a special economic zone, but they declined because they consider this as their own island," said a 64-year-old resident of the island, who gave only his first name, Nicolay.

The island lies just 15 km (9 miles) off Japan's northernmost main island of Hokkaido, which is visible on a clear day.

"It is impossible to resolve the Northern Territories issue without dialogue between leaders," Abe told reporters on Friday.

"I plan to have talks with President Putin at the United Nations and hold a face-to-face discussion on the dispute."

(Reporting by Hyun Oh; Editing by Clarence Fernandez)