Kuril islands, strategic chain at heart of Russia-Japan dispute Known as the Southern Kurils by Russia and the Northern Territories by Japan, a string of volcanic islands are at the heart of a feud between the two countries that has prevented them signing a formal World War II peace treaty. Russian President Vladimir Putin has proposed signing a peace treaty without any preconditions to Japanese Prime Minister Shinzo Abe with the hope that the territorial dispute will be resolved later. STOCKSHOTS of Yuzhno-Sakhalinsk and the Kuril Islands.