NEW YORK, September 23 (RIA Novosti) - New Japanese Prime Minister Yukio Hatoyama told Russian President Dmitry Medvedev on Wednesday that he wants to resolve a territorial dispute with Russia and conclude a peace agreement.

Opening a meeting with Hatoyama, Medvedev told the Japanese premier that "Russia is ready to discuss all issues, including the issues of cooperation, as well as more complicated ones."

"I am grateful for your words," Hatoyama replied. "There is a territorial dispute between our countries. We would like to finally resolve this issue and conclude a peace agreement."

The leaders were speaking at a meeting in New York on the sidelines of the UN 64th General Assembly session.

Hatoyama said that a row over the Kuril Islands must be resolved "in our generation in order to form new relations between Japan and Russia."

The four southern islands of the chain to the northeast of Japan were annexed by the Soviet Union after World War II. Tokyo's continued claim over the islands has so far prevented Russia and Japan from signing a formal World War II peace treaty.

Former opposition leader Hatoyama was voted in as prime minster at a special session in parliament on September 16, ending half a century of almost continual conservative rule.

Hatoyama, 62, who leads the Democratic Party of Japan (DPJ), won a landslide victory in last month's general election on promises to reverse the country's economic decline and cut taxes and bureaucracy.

Until the election, Taro Aso's Liberal Democratic Party had maintained virtually unbroken power in Japan since 1955, apart from a 10-month break in 1993.