Japan is considering taking a dispute with South Korea over its compensation of wartime forced laborers to the International Court of Justice as the deadline for seeking third-country arbitration passes on Thursday, public broadcaster NHK reported. 

The question of compensation for South Koreans for labor during Japan's 1910-1945 occupation of the Korean Peninsula has soured the U.S. allies' relations, which took a turn for the worse this month when Japan restricted exports of high-tech materials to South Korea. 

With no mutually palatable agreement, Tokyo has pushed for third-party arbitration, which Seoul has rejected. Thursday is the deadline for making those arrangements. 

NHK said that once the deadline passes, Japan would continue to push Seoul for proposals to end the dispute while preparing for countermeasures, including considering going to the International Court of Justice. 

The case cannot go to trial, however, without the agreement of South Korea, Kyodo news agency reported. 

Japan initially cited the dispute over compensation for the wartime laborers as being behind what it sees as broken trust with South Korea as it announced the tighter export controls. 

South Korea said it is considering "various scenarios" for what to do with the dispute, depending on how Japan reacts after the deadline passes. 

"We are considering various scenarios depending on how Japan will move," a diplomatic official in Seoul told Yonhap News Agency without elaborating on the scenarios. "Our response will hinge on Japan's course of action." 

"The deadline is one that Japan has designated at will," Yonhap reported citing the official. 

To defuse the dispute with Japan, South Korea has asked the U.S. to engage to find a solution. 

During his visit to Seoul on Wednesday, David Stilwell, the top U.S. diplomat for East Asian affairs, said that the U.S. will do "what it can" to support the efforts to resolve the Seoul-Tokyo spat, according to Yonhap. 

After meeting with South Korean Foreign Minister Kang Kyung-wha, Stilwell told reporters that the U.S. places a "great priority on strengthening" its relations with South Korea and Japan. 

"Fundamentally ROK and Japan must resolve the sensitive matters and we hope that the resolution happens soon," Stilwell said, using the abbreviation for South Korea’s official name, the Republic of Korea. "United States is a close friend and ally to both. We will do what we can to support their efforts to resolve this."

Last week, Stilwell told NHK the U.S. would not intervene in the dispute, and instead encouraged dialogue between Washington's two biggest allies in Asia to settle it. 

(With input from Reuters)