The Washington Post said on its website Japanese Foreign Minister Katsuya Okada told U.S. Ambassador John Roos on Friday Tokyo was moving toward accepting major parts of the 2006 deal to move the U.S. Marines' Futenma airbase from the center of a city to a less populated part of Okinawa.
"The report is not true ... We cannot accept the existing (2006) plan," Prime Minister Yukio Hatoyama told reporters in comments aired on national television.
Hatoyama, whose support rates have been sinking ahead of a key mid-year upper house election, has said he would stake his job on settling the feud by a self-imposed end of May deadline.
In the absence of a deal, speculation has simmered he might even have to step down if he fails.
Okada said later he had met Roos "recently" but also denied the Washington Post report. Kyodo news agency said Hatoyama sidestepped the question of whether Tokyo had proposed revising the 2006 deal in talks with its key ally Washington.
The Washington Post report of movement on the deal was likely to spark anger on Japan's southern island of Okinawa, whose residents plan to hold a big anti-base rally on Sunday.
It also comes a few days ahead of a visit to Japan by U.S. Assistant Secretary of State Kurt Campbell. (continues here)