NEW YORK — The foreign ministers of Japan and South Korea failed on Thursday to make progress toward resolving bilateral disputes over the contentious issue of compensation for wartime labour and over trade, but agreed to continue dialogue.

In the first meeting since taking office this month, Japanese Foreign Minister Toshimitsu Motegi told his South Korean counterpart Kang Kyung Wha the state of bilateral relations is "extremely severe" even though the need for bilateral cooperation in dealing with North Korea is "greater than ever," a Japanese official said.

"In my meeting with Minister Kang, we shared the importance of building future-oriented ties while explaining our positions over the issues facing us," Motegi told reporters in New York, where he held bilateral and UN-related meetings.

"The foundation of our friendly relationship has been shaken," Motegi said, after roughly 50 minutes of talks that lasted more than twice as long as planned.

His remarks indicated the ministers remained at odds over the issue of compensation for wartime labour, and over the escalating trade row.

Motegi was quoted as telling the meeting that he hopes to continue diplomatic dialogue toward resolving the wartime labour issue. Kang responded by expressing hope for communication at "various diplomatic levels," according to the official.

The meeting is in contrast with the lack of face-to-face talks between the nations' leaders for a year.

South Korean President Moon Jae In was not among the leaders Japanese Prime Minister Shinzo Abe held talks with during his four-day stay in New York for the Un General Assembly.

Wrapping up his U.S. trip, Abe repeated his statement Wednesday that South Korea had undermined mutual trust, and criticized Seoul's "unilateral" decision to terminate a bilateral intelligence-sharing pact.

In Thursday's meeting, Motegi urged Kang not to scrap the pact, formally called the General Security of Military Information Agreement.

Bilateral ties started to chill after a series of South Korean court rulings late last year, ordering Japanese firms to compensate for wartime forced labour during Japan's 1910-1945 colonisation.

Japan says the rulings are in breach of their bilateral accord, based on the position that both nations agreed in 1965 to settle the issue of compensation finally and completely.

After the rulings, Japan – which says its implementation of trade restrictions is unrelated to the compensation dispute – tightened controls on South Korea-bound exports of key manufacturing materials, and took Seoul off its list of preferred trading partners.

South Korea retaliated by scratching Japan from its own list of trusted partners.

US President Donald Trump touched on Japan-South Korea relations in his meeting Wednesday with Abe, who explained Tokyo's stance, a senior Japanese government official said earlier, without giving further details. — KYODO