BEIJING - Japan and the United States on Friday agreed to let a controversial US military base stay on the Japanese island of Okinawa - an agreement analysts said is a setback for Tokyo's foreign policy and adds to Japan's domestic political woes.

The two countries said in a statement that the Futenma base would not be moved from its current urban location to a less crowded part of the southern Japanese island. This runs counter to Japanese Prime Minister Yukio Hatoyama's promise when he was elected last year.

The joint statement is formal confirmation that the Japanese prime minister has given up his attempts to move the US Marines' Futenma base away from Okinawa, or even out of the country.