"Let's conclude a peace agreement, not now but by year's end without any preconditions", Putin said, with the audience breaking into applause.
"After that, I very much wish to invite President Xi to Japan", said Abe, speaking after meeting China's leader Xi Jinping on the sidelines of the forum.
Chief Cabinet Secretary Yoshihide Suga said Wednesday that Japan remains unchanged in its stance to sign a peace treaty with Russian Federation after resolving the issue of the four northern islands.
Participants of the Eastern Economic Forum in Vladivostok signed 175 agreements for a total of 2.9 trillion rubles ($42.07 bln), Russian Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev told reporters on Thursday.
Prime Minister Lee thanked President Putin for Russia's support towards establishing permanent peace and denuclearization on the Korean Peninsula, and said that the South Korean government was doing its best to implement what was agreed in June, between Presidents Moon Jae-in and Putin, including the "nine bridges" of cooperation between South Korea and Russian Federation.
A Japanese government spokesman said the country's stance had not changed.
Putin was also late for a December 2016 summit in Japan, arriving three hours later than scheduled.
"We have been trying to solve the territorial dispute for 70 years".
Some diplomats said Putin's proposal was a non-starter. "Putin does not expect anything", Kunadze told Echo of Moscow radio station. Abe smiled at the suggestion.
In his remarks on September 12, Putin said concluding a pact would create a better atmosphere and enable Russian Federation and Japan to "continue to resolve all outstanding issues like friends".
On Tuesday, Russia-China Investment Fund (RCIF) - a joint undertaking of the state-owned China Investment Corporation and Russian sovereign wealth fund - announced that a group of of Russian and Chinese businesses are considering 73 joint investment projects, with a cumulative value of more than $100 billion.
Abe has proposed making the islands a joint economic zone, which could lead to a settlement.
Russian Federation began its biggest war games since the fall of the Soviet Union on Tuesday close to its border with China, mobilising 300,000 troops in a show of force that will include joint exercises with the Chinese army.China and Russian Federation have staged joint drills before but not on such a large scale, and the Vostok-2018 (East-2018) exercise signals closer military ties as well as sending an unspoken reminder to Beijing that Moscow is able and ready to defend its sparsely populated far east.
After hours of talks, Putin brought Xi down to the Sea of Japan waterfront, where the presidents cooked up the blini at the "Far East Street" exhibit of the region's cultural and economic achievements.