The Russian President appeared to catch his Japanese counterpart off guard by agreeing to settle a 72-year dispute born from the conflict that centres on four islands between the two feuding nations that they each claim to be their own.
These are Shikotan, Etorofu, Kunashiri, and Habo mai, and are referred to as the Northern Islands by Japan, who have made increasing efforts to rid Russia of its control of them.
Should the treaty be signed by President Putin, it would automatically bring an end the fighting and restore damaged relations between Russia and Japan.
During an economic forum in the Russian city of Vladivostok last week, Mr Putin suddenly decided to settle the matter and suggested it to Mr Abe while they were both on stage together along with Chinese President Xi Jinping.
Mr Jinping said: “We have been trying to solve the territorial dispute for 70 years. We’ve been holding talks for 70 years.”
Mr Putin said: “An idea has just come into my head.”
Mr Abe then said: “Let’s change our approaches.”
Mr Putin said: “Let’s conclude a peace agreement, not now but by year’s end without any preconditions.”
He added: “It is not a joke.”
He later said such a deal would “facilitate the solution of all the problems which we have not been able to solve during the past 70 years”.
The Russian leader appeared enthusiastic about signing the treaty, suggesting he scrawl on it before stomping out issues surrounding Russia’s dispute with Japan.
Kremlin spokesman Dmitry Peskov said: “It is planned to sign the peace treaty first, and then, proceeding from relations of peace, friendship and cooperation, reach the needed consensuses.”
His comments triggered an eruption of applause from the audience but caused confusion when he seemed to backtrack immediately afterwards and said it was “naive to think that it can be solved quickly”.
This came after the Russian and Mr Abe cut off further discussions on the matter, though Mr Peskov said this was due to the leaders’ busy schedules.
But Japan appeared to also view the offer wth scepticism.
Japan’s chief cabinet secretary, Yoshihide Suga, said a peace deal should be signed “after resolving the issue of the attribution of the Four Northern Islands”.
Mr Abe also said: “Japan maintains the basic stance of resolving the territory issue first and then concluding a peace treaty.
“We shouldn’t get confused only by some comments.”
This week, Russia flexed its military muscle today in a staged mock invasion on a beach on the coast of the Sea of Japan.
The drills, part of Vostok-2018, took place despite Tokyo’s concerns about a Russian military build up in the area.