Japan has offered a compromise proposal in a long-standing territorial row with Russia under which Moscow will continue to retain the four disputed islands off Hokkaido for a transitional period as long as it confirms their sovereignty belongs to Tokyo, government sources said April 20.

The proposal was made by Prime Minister Ryutaro Hashimoto to Russian President Boris Yeltsin during their "no-necktie" summit Sunday in the seaside resort of Kawana, Shizuoka Prefecture.

Under the proposal, Japan and Russia will pursue negotiations for drawing up a demarcation line between the two countries, the sources said. If the line is set north of the disputed islands -- Kunashiri, Etorofu and Shikotan and the Habomai islets -- Japan will provisionally allow Russia to maintain effective control over the territories for a certain period, the sources said.