The first visit by a Soviet leader to Japan began Tuesday with Mikhail S. Gorbachev and Prime Minister Toshiki Kaifu discussing a territorial row that has kept desperately needed Japanese aid out of Moscow's hands.

The Kuril Islands were seized by the Soviets in the final days of World War II, and Japan has demanded their return.A Soviet official floated a proposal Tuesday for use of one of the disputed islands off Japan's northern coast: the construction of a nuclear power plant to be run jointly by the two nations.

Gorbachev adviser Arkady Volsky told The Associated Press the Soviet plan calls for the departure of all 15,000 Soviet residents of the tiny island, Shikotan, with only employees of the nuclear plant allowed to live there.

The afternoon talks by Gorbachev and Kaifu began just hours after the Soviet president and his wife, Raisa, were formally welcomed to Japan by Emperor Akihito and Kaifu at the state guest house in central Tokyo.

"I hope the talks will be as warm as today's weather," Kaifu told Gorbachev as they shook hands under a brilliant spring sky.

"I am very glad to be here, although it took a very long time for me to make my first visit to Japan," Gorbachev told Akihito during a 50-minute meeting, an Imperial Household Agency official told Kyodo News Service.

Japan has indicated it will not provide major official assistance until Moscow relinquishes its claim over the Kuril Islands, and the Soviets are badly in need of such aid.

About 3,000 right-wing nationalists, demanding the return of what Japan calls its Northern Territories, gathered in a central Tokyo park Tuesday.

They chanted "Return the Northern Territories Right Now," and "Apologize to the Japanese people."

About 20,000 police were deployed throughout Tokyo, partly to keep such protests from getting out of hand, and motorcade routes were temporarily closed to pedestrian and vehicular traffic.

Hundreds of people strained against police lines in the Ginza when Raisa Gorbachev took a seven-minute walking tour of the glittering shopping district.

Officials from both nations say Gorbachev's four-day stay marks a new era in Japan-Soviet relations despite slim prospects for a breakthrough in the territorial dispute. The countries never signed a formal World War II peace.

"It is important to find a way out of the deadlock. . . . The first visit by a Soviet leader to Japan provides a historical opportunity that should not be missed," Pravda, the Soviet Communist Party newspaper, said Tuesday.