By Hyonhee Shin and Linda Sieg
SEOUL/TOKYO (Reuters) - On the anniversary of Japan's World War Two surrender, South Korea's president on Thursday urged Japan to contemplate its wartime past and offered to engage in talks to repair strained ties, while Japan pledged to never repeat the horrors of war.
Relations between Japan and South Korea are arguably at their lowest ebb since they normalized ties in 1965, strained over the issue of South Korean forced labor during World War Two and a bitter trade row.
In a speech marking Korea's independence from Japanese rule, Moon dialed down his recent harsh rhetoric towards Japan.
"We hope that Japan will play a leading role together in facilitating peace and prosperity in East Asia while it contemplates a past that brought misfortune to its neighboring countries," said Moon.
"Better late than never: if Japan chooses the path of dialogue and cooperation, we will gladly join hands."
Moon's emphasis on talks was a departure from the stringent tone in which he said South Korea "will never be defeated again by Japan".
Japanese Prime Minister Shinzo Abe on Thursday sent a ritual monetary offering to the controversial Yasukuni shrine for war dead in Tokyo. He did not visit in person, an act which would have sparked a heated reaction from Seoul.
Seoul's foreign ministry expressed "deep concerns" over Abe sending the offering to a shrine that "beautifies Japan's colonial pillage and aggressive war".
Bitter memories of Japan's 1910-45 colonization of Korea have long haunted ties.
At a ceremony honoring war dead, Abe said Japan had engraved the "lessons of history deep in our hearts", and pledged never to repeat its devastation.
"To create a peaceful new era full of hope, we will spare no effort in working with the international community."
DIPLOMACY BACK ON TRACK?
Relations deteriorated after South Korea's Supreme Court last year ordered Japanese companies to compensate some wartime forced laborers. Tokyo says the matter was settled by a 1965 treaty normalizing ties.
The chill deepened when Japan ended South Korea's fast-track trade status this month, prompting Seoul to follow suit.
Tokyo has cited security concerns for its tightening of export controls, which South Korea called retaliation over the forced labor feud.
Strained ties between the two key U.S. allies have worried Washington, which fears weakened security cooperation in the face of North Korea's threat and China's rise.
Japanese and South Korean vice foreign ministers reportedly plan to meet this week in Guam to discuss the issue.
Leif-Eric Easley, who teaches international relations at Ewha University in Seoul, said Moon's speech was meant to "leave the door open for diplomacy".
"Recent escalation demonstrated a lack of appreciation for the economic interests at stake, for the other side's domestic politics, and for the severe regional security situation," he said.
'BITTER AND FURIOUS'
In downtown Seoul, thousands of South Koreans in raincoats, including some victims of forced labor, staged a massive rally, marching toward the Japanese embassy and chanting "Fight!" and "Compensate!"
Holding a banner saying "No Abe, No Mitsubishi," Yang Geum-deuk, 90, said she was given barely any food and often beaten by Japanese authorities for not quickly using the bathroom while at Mitsubishi.
"We Koreans were treated as animals," Yang said. "But we're strong now ... and my wish is to hear a word of apology from Abe, as the world knows how we suffered in Japan."
New emperor Naruhito, speaking at the same ceremony as Abe, expressed "deep remorse" over Japan's wartime past and prayed for global peace in remarks that echoed those of his father, Akihito.
Past visits by Japanese leaders to Yasukuni have outraged South Korea because the shrine honors 14 Japanese convicted as war criminals.
Abe has only visited once since taking office in 2012, but has regularly sent offerings on major occasions.
Ruling party lawmaker Tomomi Inada, a former defense minister and now special aide to Abe, made the shrine offering on behalf of the premier, whom she quoted as thanking those who gave their lives for their homeland and contributed to Japan's peace and prosperity, domestic media said.
A steady stream of visitors paid their respects at Yasukuni, while police, some in anti-riot gear, patrolled nearby. A sign on the grounds warned that activities such as hoisting flags, demonstrating or destroying property were banned.
"The people enshrined here fought for Japan and we have come to express our gratitude and to show them our resolve to build a better Japan," said Yoshiko Matsuura, 71, a former ward assembly member from Tokyo visiting with other local politicians.
'ONE KOREA'
In his Liberation Day speech, Moon laid out ambitious goals for ties with North Korea, vowing efforts for a successful joint hosting of the 2032 Olympics and unification by 2045, which will mark the 100th anniversary of liberation.
Moon called for Pyongyang and Washington to resume nuclear talks as soon as possible, which speed not only efforts to give up nuclear weapons but business ties between the neighbors.
"When economic cooperation accelerates and the peace economy begins, unification will beckon," Moon said.
"I pledge to solidify the foundation so that we can ... stand tall in the world as one Korea by achieving peace and unification by 2045."
Such goals have long been considered distant, but the comments come at a sensitive time, amid a series of missile tests by the North, stalled nuclear talks and a virtual halt in communications between the neighbors.
"The 'One Korea' plan could sound like a grand vision but may well end up as an empty promise without a clear, shared understanding of denuclearization to advance dialogue and concrete action plans," said Kim Hong-kyun, a former South Korean nuclear envoy.