The United States on Friday welcomed a breakthrough agreement between China and Japan that calls for the two Asian rivals to put a territorial dispute aside and seek better ties through various dialogues.

The agreement significantly raised the possibility of a summit between Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe on the sidelines of next week's annual summit of the Asia-Pacific Economic Cooperation (APEC) forum.

"We would welcome this statement between China and Japan that outlines agreed steps to improve relations," State Department spokeswoman Jen Psaki said. "As two of the three largest economies in the world, relations between the two countries affect the peace and prosperity of not only the region but the world."

Xi has refused to hold a summit with Abe amid the sovereignty dispute over a cluster of islands in the East China Sea, known as the Diaoyu in China and Senkaku in Japan, and tensions stemming from Japan's attempts to glorify its militaristic past.

Friday's agreement, which came after a meeting between Chinese State Councilor Yang Jiechi and Japanese National Security Adviser Shotaro Yachi, calls for the two countries to acknowledge different positions on the island row and ensure through dialogue that the dispute does not worsen.

"The two sides have agreed to gradually resume political, diplomatic and security dialogue through various multilateral and bilateral channels and to make efforts to build political mutual trust," the two sides said in a statement issued simultaneously.

Unlike the improving ties between Beijing and Tokyo, South Korea's relations with Japan have shown no signs of improvement.

Officials said that South Korean President Park Geun-hye and Abe are unlikely to hold a summit on the sidelines of next week's APEC forum.

Frayed relations between Seoul and Tokyo have been a cause for concern for the United States as Washington seeks to develop three-way security cooperation in an effort to keep a rising China in check. The U.S. has called for Seoul and Tokyo to come to terms with each other. (Yonhap)