National Assembly Speaker Moon Hee-sang plans to propose a bill next week on compensating victims of Japan's wartime forced labor in an effort to resolve strained ties with Tokyo.

The bill that he has been preparing, dubbed "one-plus-one-plus-alpha," envisions the establishment of a 300 billion won fund with contributions from both South Korean and Japanese businesses and citizens to compensate around one-thousand-500 Korean victims. 

Moon's foreign affairs adviser Hahn Choong-hee said the plan could be discussed at an anticipated meeting between the leaders of South Korea and Japan on December 24.

He said the bill is doable if the legislative process for it is launched as scheduled, adding the speaker and his aides hope it can serve as a catalyst in creating an amicable atmosphere between the two neighboring countries.

The bill has drawn attention as a potential avenue to resolve a bilateral trade row initiated when Japan applied export curbs on South Korea in apparent retaliation over top court rulings last year in favor of Korean forced labor victims against Japanese firms.

Tokyo maintains that all colonial-era reparation issues were settled in the 1965 treaty that normalized Seoul-Tokyo relations.