South Korean President Park Geun-hye attended a ceremony hosted by the Japanese embassy in Seoul as the two nations marked the 50th anniversary of Japan and South Korea normalizing relations after Japan's colonisation and World War II conquest.
Japanese Prime minister Shinzo Abe reciprocated by attending a ceremony at the South Korean embassy in Tokyo to mark the event.
Leaders from both sides promised to work together to mend ties strained by a territorial dispute and a feud over South Korean "comfort women" forced to work in Japan's wartime military brothels.
Japanese Prime Minister Shinzo Abe says a frank discussion at the highest level was needed to resolve these thorny issues.
"Japan and South Korea being neighboring countries have various problems to resolve. And because we have problems to resolve, I believe it is important to be able to talk frankly with each other."
But Park and Abe have not met one-on-one since both of them took office more than two years ago, a sign that relations between the two Asian powerhouses are still at a low.
The latest downturn began in 2012, when the former South Korean President visited a cluster of contested islets in the Sea of Japan that are controlled by Seoul, but are also being claimed by Japan.
South Korean Foreign Minister Yun Byung-se, however, was in Japan to mark this historic anniversary and met his Japanese counterpart. It is the first time in four years that a South Korean foreign minister has set foot in Japan.
Yun says the two sides were positive about strengthening bilateral ties.
"If we approach these issues with a spirit of trust and compromise, I believe it'll be a big help to improving the two countries' relations and a big help to holding a summit meeting."
Japan's occupation of the Korean peninsula from 1910-1945 is at the core of the mutual mistrust between the two countries.
Tokyo and Seoul signed an agreement to restore ties in 1965 after Japan agreed to an 800 million US dollar war reparations package.
Tokyo has also offered two landmark apologies in the 1990s over Japan's conduct during its colonial rule of the Korean peninsula. The Kono statement, issued in 1993, and the Murayama statement, in 1995, both touched on the imperial army's atrocities.
But Seoul is pushing for more compensation from Tokyo, and South Korean authorities say negotiations on the issue of "comfort women" were now "in their final stage".
Meanwhile, about 50 activists including descendants of Koreans who were conscripted to the Japanese imperial army protested in front of the Japanese embassy in Seoul
"We urge Japan to take measures to compensate victims who were forced to do hard labour as we mark the 50th anniversary of the establishment of Korea-Japan bilateral relations."
The Japanese and South Korean foreign ministers agreed on Sunday to organize for a three-way summit that may include China by the end of the year, paving the way for the first one-on-one meeting between the leaders of Seoul and Tokyo.
