* Abe-Obama meeting set for third week of February
* U.S. urges Japan, China to resolve island dispute peacefully
* Military realignment, trade pact also in focus
By Andrew Quinn
WASHINGTON, Jan 18 (Reuters) - Secretary of State Hillary Clinton assured Japan on Friday of U.S. support in Tokyo's dispute with Beijing over a string of islands and invited new Japanese Prime Minister Shinzo Abe to Washington in late February for a meeting with President Barack Obama.
Clinton held a working lunch with Japanese Foreign Minister Fumio Kishida, and both emerged pledging that U.S.-Japan security and economic ties would remain strong following Abe's landslide election victory last month.
"Our alliance with Japan remains the cornerstone of American engagement with the region," Clinton told reporters, noting a wide range of cooperation on everything from disaster relief to the stand-off over nuclear North Korea.
Clinton, due to step down in coming weeks, again affirmed that the United States would stand by its longtime ally in its territorial dispute with China over islets in the East China Sea claimed by both countries.
Tensions over the tiny islands, known as Senkaku in Japan and Diaoyu in China, have flared in recent months, one of several maritime territorial disputes involving China that have worsened as Washington seeks to shift its security focus to Asia.
"Although the United States does not take a position on the ultimate sovereignty of the islands, we acknowledge they are under the administration of Japan," Clinton said, repeating the long-standing U.S. position on the dispute.
"We oppose any unilateral actions that would seek to undermine Japanese administration, and we urge all parties to take steps to prevent incidents and manage disagreements through peaceful means."
Kishida signaled that Abe, who had taken a tough stance on the dispute during his election campaign, was not eager to escalate the conflict.
"While Japan will not concede and will uphold our fundamental position that the Senkaku islands are an inherent territory of Japan, we intend to respond calmly so as not to provoke China," he said through an interpreter.
Clinton announced that Abe had been invited to Washington in the third week of February to hold his first meeting with Obama.
Abe had hoped to make the United States his first overseas visit following his election last month on a platform that called for both reviving Japan's struggling economy and coping with China's rising power in the region.
But the visit was postponed due to Obama's tight schedule, and Abe traveled instead to Southeast Asia before cutting the trip short this week to return home after Japanese workers were caught up in the hostage crisis in Algeria.
U.S. officials describe a generally healthy relationship with Tokyo, albeit one hampered by frequent changes in the Japanese leadership. Kishida is the sixth Japanese foreign minister to hold office during the four years that Clinton has been America's top diplomat.
Abe came to power partly on a nationalist platform and wants to revise Japan's U.S.-drafted constitution adopted after World War Two. U.S. officials have indicated they would like to see Japan loosen constitutional restraints on its military to enable a bigger global security role.
The United States and Japan have also sought to cooperate on plans to streamline the U.S. military presence in the southern Japanese island of Okinawa including proposals to move the Futenma air base to a new site.
Clinton said she was confident that the two sides could make further progress on the issue, while Kishida said the Abe administration was committed to working through a framework deal the two sides announced last year.