Japan's prime minister sidestepped questions on Saturday about reports he was about to agree to keep a U.S. military base on Okinawa island, a move that would settle a dispute with Washington but upset locals, Reuters reported.
Japan's Asahi newspaper said on Saturday it was increasingly likely he would agree to the plan, and Sankei newspaper has said he would tell U.S. President Barack Obama, when he visits next month, that the matter would be settled by year-end.
Prime Minister Yukio Hatoyama denied the Obama visit was a deadline for solving the spat which is highly sensitive both for relations with Washington and for internal political reasons.
"As I said before, it is not something we need to rush because President Obama will come to visit," Hatoyama told reporters in the Thai seaside town of Hua Hin, where he was attending an Asian summit.
A broad plan to reorganize U.S. forces in Japan was agreed in 2006 with Japan's long-dominant conservative party after a 1996 deal failed to gain support of local people.
Many residents on the island of Okinawa, home to about half the 47,000 U.S. military forces in Japan, complain about crime, noise and pollution associated with the bases and say they have borne an unfair share of the burden for the security alliance.
Central to the reorganization deal is a plan to move the functions of the Marines' Futenma air base from a crowded urban area of Okinawa to a more remote part of the island, and shift 8,000 Marines from Okinawa to the U.S. territory of Guam.
Hatoyama, who took office in September, said during the election campaign he wanted the base moved off the island, which lies 1,600 km (1,000 miles) from the mainland -- something U.S. officials said would undermine broader security agreements.
Foreign Minister Katsyua Okada said on Friday it was unrealistic to shift the functions of Futenma off Okinawa.
But Hatoyama said that was merely Okada's view. "I am the one to make a final decision," he said.
Asked whether moving the base off Okinawa was still an option, Hatoyama said: "Saying it is difficult is not the same as saying it is out of the picture."
"The agreement between the United States and Japan is important. But what we advocated during the election is also important," he added. "And we should respect the feeling of people in Okinawa the most."