TOKYO/SEOUL (REUTERS) - Japan and South Korea agreed on Wednesday (Aug 21) on the need for dialogue to resolve a feud over compensating Korean wartime workers that has spilled over into trade, and put a deep chill on ties between Washington's two Asian allies.

Japanese Foreign Minister Taro Kono, speaking outside Beijing after talks with South Korean Foreign Minister Kang Kyung-wha, said the two countries shared the view on the need to resolve the dispute, which is a bitter legacy of Japan's 1910-1945 colonisation of the Korean peninsula.

The talks were on the sidelines of three-way talks with China.

"In that sense, I want to firmly make progress towards resolving (this matter)," Mr Kono said in comments carried live on Japanese public broadcaster NHK.

"I think the fact that we ... were able to talk in this difficult situation could lead to big progress towards resolving this problem," Mr Kono said. "I want to stay in close touch and continue to talk."

A South Korean official said the meeting had been meaningful in restoring diplomatic dialogue and that the two sides agreed to keep talking, South Korea's Yonhap news agency reported.

Relations soured last October after the South Korean Supreme Court ordered some Japanese firms to compensate Korean wartime workers, a move strongly condemned by Tokyo, which says the matter was resolved by a 1965 treaty normalising ties.

The feud has spilled over into trade, after Japan tightened export controls on materials vital to South Korean chipmakers and then dropped Seoul from a list of countries eligible for fast-track exports, prompting South Korea to take a similar step towards Japan.

South Korea's Dr Kang again urged that Japan's tightened controls be eased, and relayed concerns about media reports and international environmental groups' claims that Japan plans to release contaminated water from the Fukushima nuclear plant into the ocean, Yonhap said.

Mr Kono also said Japan wanted Seoul and Tokyo to maintain a military intelligence-sharing pact that could expire if South Korea decides not to roll it over this week.

"This is an important framework for the United States, Japan and South Korea and ... should be maintained," Mr Kono said, adding that he had discussed the intelligence pact with Kang.

Though Dr Kang declined to comment after the meeting whether South Korea will renew the deal, Kim Sang-jo, policy chief of President Moon Jae-in, said on Wednesday that Seoul will continue consideration "until the last minute." Mr Kono urged both China and South Korea to scrap their import curbs on produce from areas around Japan's Fukushima nuclear disaster site, where three reactors suffered melt downs after an earthquake and tsunami in 2011.

Seoul said on Wednesday it would double radiation testing of some Japanese food imported into South Korea, for fear of potential contamination from the Fukushima plant.

An official at Japan's Ministry of Agriculture, Forestry and Fisheries said Japanese food products were safe and increased radiation testing was unnecessary.

At their meeting earlier this month in Bangkok, Mr Kono and Dr Kang were unable to bridge the gap between their countries despite calls from the United States to work out their differences.

They did, however, agree to cooperate regarding North Korea.

The North has carried out a series of short-range ballistic missile tests in recent weeks, underscoring the need for Japan and South Korea, both key US allies in Asia, to remain on the same page on security matters.

South Korea, however, has recently suggested it may pull out of a bilateral intelligence-sharing pact with Tokyo because of the soured ties.

The two countries are facing a deadline later this week for a decision on whether to extend the General Security of Military Information Agreement, or GSOMIA, for another year.