Japan grapples with U.S. base plan before Obama visit

Japan's Foreign Minister Katsuya Okada attends a news conference in Shanghai September 28, 2009.

TOKYO (Reuters) - Japan struggled with the touchy issue of reorganizing U.S. military bases on the southern island of Okinawa on Wednesday, just a week ahead of U.S. President Barack Obama's first visit to Japan as leader.

Foreign Minister Katsuya Okada canceled a last-minute trip to Washington meant to smooth ties ruffled by a feud over bases, blaming his busy schedule, while Prime Minister Yukio Hatoyama came under fire in parliament for his handling of the relationship, the core of security arrangements in the region.

U.S. Assistant Secretary of State Kurt Campbell was due to meet Okada on Thursday, but it remained unclear whether a way could be found to keep the feud from spoiling Obama's visit.

Hatoyama, in office for less than two months, has pledged to build a more equal relationship with the United States and review bilateral security agreements, sparking concern among investors about the alliance.

He said before his August election victory that the Futenma U.S. Marine base should be moved off the island, an idea supported by 70 percent of Okinawa residents in a poll published this week by the Mainichi Shimbun and local paper Ryukyu Shinpo.

But Washington wants to push ahead with a 2006 plan to relocate it in a less heavily populated part of Okinawa.

Okada spelled out the dilemma facing the new government.

"We think that it is necessary to move things forward while accepting the feelings of the people in Okinawa," he said in response to a question in parliament.

"But, while we will respect the feelings of the people of Okinawa, this issue is also about the Japan-U.S. security alliance, which is relevant to the entire country. This gap is what always becomes the big problem," he added.

"DANGEROUS STATE"

Former defense minister Shigeru Ishiba of the long-dominant Liberal Democratic Party (LDP) took aim at Hatoyama's dealings with the United States in an interview with Reuters on Wednesday.

"Since the Democratic Party took power, the alliance has fallen into a crisis. It is in a very dangerous state," he said.

Ishiba cited disagreements from the base issue to possible cutbacks in the funding Japan provides for U.S. military bases and the likely end of a refueling mission in the Indian Ocean in support of U.S.-led military activities in Afghanistan.

"Just saying 'no' to everything the United States wants is not the way to create a more equal partnership," he added, after quizzing Hatoyama over the issue in parliament.

Chief Cabinet Secretary Hirofumi Hirano told reporters Okada's U.S. trip was canceled because of scheduling difficulties and denied that would affect ties.

"The foreign minister himself thought of this as a way to make things even smoother, but I do not think the cancellation will affect relations with the United States," he added.

Obama is set to visit Japan for the first time as leader on November 12-13, on the first leg of an Asian tour. U.S. Defense Secretary Robert Gates urged Japan during a visit last month to resolve the base dispute by then.

Hatoyama, who met Obama in New York on the sidelines of a U.N. meeting in September, has said he wants more time to review the plan and does not see the visit as a deadline for a decision.

"Efforts to maintain the alliance are not just a question of avoiding a huge row," Ishiba said.

"It's a question of mutual trust. It would be a great shame if he went away disappointed," he added.

Hirano said on Wednesday the Japanese government's plans to review the deal should not be seen negatively.

"Reviewing the agreement with the United States is meant to be a positive thing, looking to make the relationship deeper and multi-layered," he said.

(Additional reporting by Yoko Kubota; Editing by Linda Sieg and Jerry Norton)