GINOWAN, Japan - The United States and Japan look set to avoid a collision over where to relocate a Marine base when President Barack Obama visits Tokyo next week, but the row could still fray security ties in the months ahead.

A dispute over a replacement facility for Futenma air base on Japan's southern island of Okinawa, a key part of a realignment of U.S. troops in Japan, has strained the alliance, seen as the core of regional security arrangements.

The row coincides with deepening questions about how China's rising military and economic clout will reshape security ties.

Japanese Prime Minister Yukio Hatoyama, who took office in September pledging to forge more equal ties with Washington, had said before his party's election victory that he wanted to move the base off Okinawa to ease the burden on residents there.

But U.S. officials say they want to push ahead with a 2006 deal to move it from the crowded city of Ginowan in central Okinawa to a remoter site by 2014 as a prerequisite to moving 8,000 Marines off the island to the U.S. territory of Guam.

Washington has notified Japan it will not press for a decision by Obama's November 12-13 visit, but wants a resolution to the dispute by the end of the year, the Nikkei newspaper said.

But Hatoyama repeated on Friday that he had no plan to decide by the time of Obama's trip -- or to say when he would make up his mind.

U.S.-Japan relations are not just about the Futenma issue, Hatoyama told a parliamentary panel.

There are many issues that President Obama is concerned about and issues that Japan is concerned about, so we would like to discuss each theme, he said. I am convinced it will be a meaningful trip.

PM'S DILEMMA

Japanese Foreign Minister Katsuya Okada has also floated the end of the year as a de facto deadline, but Hatoyama has suggested he might wait until after an Okinawa mayoral election in January to get a reading on local public opinion.

Hatoyama faces a dilemma as he tries to live up to his campaign comments without disrupting ties with Tokyo's closest security ally as both countries try to adapt to China's growing clout.

Many residents of Okinawa, a subtropical island about 1,600 km (1,000 miles) south of Tokyo that hosts about half the 47,000 U.S. military personnel in Japan, have long resented what they see as an unfair burden for maintaining the security alliance.

A mass anti-base rally has been called for Sunday, just days before Obama arrives in the Japanese capital.

I want to get rid of it, said Toshio Arakaki, 52, whose three children go to a primary school a stone's throw from the base. If they are going to replace it, they should find somewhere not just outside Okinawa, but outside Japan. Okinawa has had enough.

Other Okinawa residents, though, worry about the economic impact of closing the bases, since the island is otherwise mainly reliant on an influx of tourists attracted by white sandy beaches, clear seas and a unique culture that owes much to China.

If Hatoyama decides before January to implement the original deal, perhaps with minor changes, that would almost certainly upset a small but vocal coalition partner ahead of an election for parliament's upper house in mid-2010.

Further delay would make deciding harder and risk angering Washington, although few analysts expect strains over security ties to affect trade and investment between the world's two biggest economies.

In Japan, it is always legitimate to say, 'Let's start the negotiations from scratch', but the Americans are not going to put up with that, said Steven Reed, a professor at Chuo University.

Okada has proposed considering an alternative plan to merge the Marine base with another U.S. base on Okinawa, but Washington has rejected the idea. Both Hatoyama and Japan's defense minister have expressed disagreement with it.

(Additional reporting by Yoko Nishikawa and Chisa Fujioka in Tokyo; Writing by Linda Sieg; Editing by Jeremy Laurence)

China Barack obama Japan