UPDATE 2-Japan, US stress tight ties despite airbase feud

* Japan PM Hatoyama set to visit Okinawa on Sunday

* U.S. official sees progress in airbase talks

* Japan, US to work together on North Korea problem
(Adds U.S. official sees progress in talks, paragraphs 9-11)

By Isabel Reynolds and Chisa Fujioka

TOKYO, May 21 (BestGrowthStock) – Japan and the United States
played down on Friday a feud over a U.S. airbase which has
frayed relations, saying the alliance was more vital than ever
given regional threats such as an unpredictable North Korea.

A dispute over the U.S. Marines’ Futenma airbase on Japan’s
southern Okinawa island has distracted the allies as they try
to cope with changing regional dynamics, including a rising
China.

Japanese voter perception that Prime Minister Yukio
Hatoyama has mishandled the row is eroding support before a
mid-year election his party needs to win to avoid policy
paralysis, and has even sparked speculation he may resign.
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Graphic on Japan voter support:
http://r.reuters.com/myv63g
Graphic on voting intentions:
http://link.reuters.com/jev83j
For more stories on Japanese politics click
[ID:nPOLJP]
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Calling the 50-year-old alliance “rock solid,” U.S.
Secretary of State Hillary Clinton said the two allies were
working together to resolve the dispute.

“This partnership is essential for meeting the challenges
not only of today but also of tomorrow,” she told a joint news
conference with Japan’s foreign minister during a brief visit.
Her trip includes stops in China and Seoul, where Pyongyang’s
sinking of a South Korean navy ship will top the agenda.

“It is good to be reminded, as we recently were with the
unprovoked attack on the Korean vessel, that there are still
dangers and challenges that confront us together,” she told the
news conference, where she strongly condemned Pyongyang’s
action and called for an international response.

South Korea accused the North on Thursday of torpedoing one
of its warships, heightening regional tension.

“We need to be aware this could happen to us. There is no
guarantee it won’t happen to Japan,” Japan’s Foreign Minister
Katsuya Okada told a solo news conference after a joint
appearance with Clinton.

A senior U.S. official traveling with Clinton said the two
sides had made headway in talks on settling the Futenma issue
but he offered no details.

“We’ve seen some progress,” said the official who spoke to
reporters on condition of anonymity in Shanghai, where Clinton
began a four-day trip to China.

“We still have some work to do, but I would say that the
meetings today were somewhat hopeful,” he added, saying
Hatoyama and Okada had given assurances “that we would be able
to resolve these matters expeditiously”.

ISLANDERS SPLIT

In the election that swept his Democratic Party to power
last year, Hatoyama raised hopes on Okinawa — host to about
half the U.S. forces in Japan — that Futenma could be moved,
despite a 2006 deal to shift it to a less crowded site on the
island.

Hatoyama has set himself an end-of-May deadline for
resolving the issue, but with no new deal in sight has changed
tack, saying some Marines would have to stay on the subtropical
island to deter threats. That shift has outraged many Okinawans
and upset a small ruling coalition partner, the Social
Democratic Party.

Domestic media say the two governments will announce on May
28 an agreement to stick to the 2006 plan with minor changes, a
decision likely to be greeted with anger when Hatoyama visits
Okinawa on Sunday for the second time this month.

But in a development that will encourage Hatoyama, a panel
representing the tiny community of Henoko, adjacent to the
proposed site of the relocated facility, voted on Friday to
accept the 2006 plan with conditions, Kyodo news agency said.

Those conditions include shifting the site of the proposed
new runways further out to sea to reduce noise, and increasing
the amount of compensation, Kyodo said.

“It’s not that we want to attract the base, but if the
government is forced to come back to us, we want to ask for the
best possible conditions,” Kyodo quoted Yasumasa Oshiro, the
head of the local assembly, as saying.

Both Okada and Hatoyama stressed after meeting Clinton the
need for the U.S. troop presence in Japan, whose own military
is constrained by its pacifist constitution.

“I want to explain frankly to the Japanese people that the
presence of U.S. troops in Japan is indispensable to Japan’s
security and to the peace and stability of the region in the
current security environment,” Okada told the news conference.
Investment Research

(Additional reporting by Arshad Mohammed and Charlotte Cooper;
Writing by Linda Sieg; Editing by Ron Popeski)

UPDATE 2-Japan, US stress tight ties despite airbase feud