Seoul and Tokyo have agreed in principle to compensate victims of forced labor, a local news network reported Monday.

Citing an unnamed high-level official within the ruling bloc, Yonhap News Television reported that President Moon Jae-in and Japanese Prime Minister Yoshihide Suga agreed that the victims should be compensated.

“The two leaders have agreed on compensating the forced labor victims. The plan is for Cheong Wa Dae and the Ministry of Foreign Affairs to meet with their Japanese counterparts to discuss the method, and for the two leaders to meet and make the decision,” the unnamed official was quoted as saying by Yonhap News Television.

The South Korean government has not confirmed the reports, with officials stating only that Seoul and Tokyo share the view that relations should be improved.

The ruling Democratic Party’s Rep. Kim Jin-pyo, who met Suga as the chairman of the Korea Japan Parliamentarians’ Union, declined to comment on the report.

Speaking in a radio interview on Monday, Kim denied knowledge of the reported agreement. While saying that the two sides had been discussing the issue for some time, Kim said agreeing to a deal would be a difficult choice for Korean and Japanese political leaders in light of strong anti-Korean and anti-Japanese sentiment in the respective countries.

The matter of paying damages to the Koreans forced to work for Japanese firms during Japan’s occupation of the Korean Peninsula in the first half of the 20th century is at the heart of the deteriorating Korea-Japan relations. The Korean Supreme Court has sided with the victims and set in motion the process of liquidating concerned companies’ assets. The companies and the Japanese government maintain that all related disputes were settled in a 1965 treaty and that the Korean government should resolve the issue to improve bilateral relations.

By Choi He-suk (cheesuk@heraldcorp.com)