With just days remaining until the summit in Tokyo, Japanese officials held consultations with their Chinese counterparts, believing an agreement on the gas exploration issue "would be the biggest achievement of the leaders' talks," a source at the Foreign Ministry said.

  However, the two sides apparently could not resolve differences concerning the area where joint gas development should take place, the sources said.

  There could, however, be a deal on such issues as setting a target date for reaching the final agreement, they said.

  Failure to reach an agreement at the top-level meeting may cloud the outlook of negotiations on what many see as the biggest pending bilateral issue and may also raise questions about how successful the summit will be.

  The gas exploration dispute stems from the unsettled demarcation of the East China Sea, where the exclusive economic zones claimed by the two countries overlap.

  China has already begun production in the Tianwaitian area of the Chunxiao oil and gas field, which is just west of the line that Japan says divides the two nations' exclusive zones.

  Beijing does not recognize the line and claims its exclusive economic zone stretches further to the edge of the continental shelf, closer to Okinawa Prefecture.

  Fukuda earlier showed confidence in reaching a breakthrough, saying it may well be settled in spring. On Sunday, Hu told Japanese reporters that China is "exerting great efforts" to resolve the gas exploration row.