South Korean President Lee Myung-bak on Monday met with visiting former Japanese prime minister Taro Aso, a move that reflects the willingness of both countries to end their two-month-long diplomatic row.

Aso is the first prominent Japanese political figure to officially meet Lee since Lee's August visit to a disputed archipelago, which Seoul calls Dokdo and Tokyo calls Takeshima.

Observers said the countries' bilateral economic interdependence, the currency-swap pact that is expected to be renewed, and possible lobbying by Washington are among the driving forces behind the "pragmatic choice" from both sides to shelve their feud.

Amid the limelight of the meeting in the presidential residence Cheong Wa Dae, Lee told Aso that good opportunities are expected to boost and develop their bilateral ties in spite of the differences between the two countries.

Aso attended an annual friendship meeting of the Korea-Japan Cooperation Committee session on Monday morning in Seoul as the acting chairman of the civilian forum from Japan.

"From a broad perspective and based on the idea of taking a cool-headed approach, Japan and Korea must make efforts to build a stable relationship," Japanese Prime Minister Yoshihiko Noda said in a written remark to the friendship meeting.

Zhang Liangui, an expert on Korean studies at Party School of the Central Committee of the Communist Party of China, said the two major economies in the region have brought economic issues to the top of their agendas because "they know they cannot live without each other".

"They both are not risking trade, and measures will be taken to put the row under control," Zhang said.

In August, Japan threatened to reconsider a decision to expand a foreign-exchange swap agreement with South Korea. The bilateral pact is expected to expire at the end of October.

Yet Yonhap News Agency quoted Japanese government sources as saying that both sides will talk about renewing the pact this week in Tokyo. Japan is now South Korea's third-largest trading partner.

Ahn Choong-yong, a professor at the Graduate School of International Studies of Chung-Ang University in Seoul, told Seoul-based Chosun Ilbo that the icy status of South Korean-Japan ties will probably continue in political and social dimensions, yet it is necessary to calmly "separate the economic side from the politics".

South Korea and Japan are reciprocal and integral to each other in the economic field, and "Japan itself is believed not intending to let the issue damage the trust between the partners in economic collaboration", Ahn said.

Meanwhile, Lee told the Monday morning meeting in a written speech that South Korea and Japan should move their relations forward "with the courage and wisdom to look squarely at history" as their ties suffered a serious setback from sovereignty and history spats.

Memories of Japan's wartime aggression in the first half of the 20th century led to resentment toward its militarist past from its neighbors, including South Korea and China.

Japan is also accused of turning a blind eye to demands to resolve the issue of its forcing women from east Asia, including China and Korea, into sexual slavery for Japanese troops during World War II.

Poll figures shows that 71 percent of the public in Japan and 78 percent in South Korea believe that the series of ups and downs brought by the bilateral territorial row has "greatly impacted" bilateral ties, according to a joint survey by Tokyo-based newspaper Mainichi Shimbun and Seoul's Chosun Ilbo released last week.

Also in a written message to the friendship meeting, Japanese Prime Minister Yoshihiko Noda said "the cooperation between the US and its alliances with Japan and South Korea, as well as the (trilateral) collaboration of Japan, South Korea and the US, are expected to be the axis of the region's peace and security", Yonhap reported.

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