It’s been an eventful week in Japan, what with South Korea’s President insulting the emperor, Cabinet members paying homage to war criminals, Chinese protesters landing on a disputed island and local citizens demanding an apology and compensation for a land battle on Okinawa 67 years ago.

It’s just more evidence that the legacy of World War II is alive and not well in Asia. While resumption of open hostilities seems unlikely, the odds are getting better all the time.

“For China and Korea, the war is still unfinished business,” says Brad Glosserman, executive director of the Pacific Forum CSIS in Honolulu. “What we’re seeing played out now is the politics of resentment and grievance. It’s emotionally satisfying, but in the absence of genuine leadership, the situation is only going to get worse. So when there’s another incident that sparks a confrontation, does that become a sobering moment, or kindling for the fire?”

This week should have been a time of solemn remembrance and reflection. Aug. 15 marked the 67th anniversary of Japan’s surrender, the end of Japan’s brutal colonization of Korea and occupation of large parts of China. More than 20 million soldiers and civilians were killed during 10 years of conflict, including 3.1 million Japanese.

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Facing a tough election season, South Korean President Lee Myung-bak chose this week to visit the Takeshima island chain, known in Korea as Dokdo. It was the first visit there by a South Korean leader, and it angered the Japanese, who believe the island rightly belongs to them.

Lee then upped the ante by claiming that Japan was not genuinely remorseful for starting the war and had never “sincerely” apologized. And he topped things off by proclaiming that Japan’s Emperor Akihito, a revered figure at home, would not be allowed to visit South Korea unless he “apologize from the heart” for Japan’s colonial rule — never mind that the emperor had never accepted an invitation to visit South Korea and that Japan had no plans to send him.

“From our point of view, this was the most offensive position [Lee] could have taken,” says Kazuhiko Togo, director of the Institute for World Affairs at Kyoto Sangyo University in Japan. “We went through a very difficult period of soul-searching after the war from which emerged a general understanding among the majority of Japanese that much was wrong with our colonization of Korea. And in totality, in my view, the Japanese side has expressed a proper and sincere apology.”

Lee’s performance was certainly aimed at least in part at a domestic audience. His political party is facing a tough presidential campaign this fall and Lee — who is constitutionally barred from re-election — has been accused of being soft on Japan.

Domestic politics are no excuse, says Togo, a former Foreign Ministry official.

“There is an increasing sense of frustration in Japan that everything we’ve done is being denied and negated by the Koreans and that we are being deliberately provoked, for no good reason. This is disturbing and potentially dangerous,” says Togo, considered one of Japan’s most moderate voices on territorial disputes and foreign policy.

Japanese officials have issued dozens of apologies and paid compensation to victims, but many in Asia question the depth of Japan’s sincerity and willingness to honestly examine its past.

It’s not hard to see why. Two Cabinet members defied recent practice this week and prayed at Yasukuni Shrine — where 14 convicted war criminals are enshrined along with millions of other war dead. Although the shrine is nominally nonpolitical, it supports a modern and well-funded war museum that claims, among other things, that President Franklin Roosevelt schemed to force Japan into attacking the U.S. and denies well-documented reports of imperial-army atrocities. An otherwise exhaustive museum in Hiroshima dedicated to the atomic bombing there in August 1945 provides little background or discussion of the war that preceded it.

M.G. Sheftall, a military historian and associate professor of culture and communication at Shizuoka University, says Japan is viewed with some suspicion in the region in part because it retained many of the trappings of its wartime identity and has avoided a wide discussion of the role of the imperial family during the war.

“They kept their flag. They kept the ‘Kimigayo’ [national anthem]. And they kept the Emperor, who in 1945 about 90% of the world wanted at the end of a rope,” says Sheftall. “It’s very hard for Japan to grab the moral high ground because they haven’t come to terms with their own history.”

Lee says his visit to Dokdo/Takeshima was motivated in part by Japan’s claim in a defense white paper issued earlier this month that the islands remain Japanese territory. Japan annexed the group of small islands, located about halfway between Japan and South Korea, in 1905 but lost possession with the end of war. Korean armed forces occupied the island in the mid-1950s, and its possession, for better or worse, has remained a source of national pride and identity. The South Korean navy named its largest warship after the islands; a member of its Olympic soccer team lost his place on the podium for unfurling a flag proclaiming “Dokdo Is Our Territory” after beating the Japanese team for the bronze medal.

Ironically, Japan seemed to be trying to soften relations with both South Korea and China. The white paper, issued annually, repeated Japan’s long-standing claims to Takeshima/Dokdo but contained no new assertions. It stated that South Korea “shares the closest relationship with Japan” of all its Asian neighbors — a distinctly friendlier tone than in previous years.

Similarly, the white paper repeated Japan’s claims to the Senkaku Islands (which are also claimed by China and Taiwan but are administered by Japan). But it stated that Japan “welcomes the fact that China, which is growing into a big power, has started playing a major role in the world and the region.” Hardly belligerent stuff.

The U.S. has been trying to stay out of the region’s territorial disputes. But the enmity between two of its closest allies could jeopardize U.S. security interests even as it strives to meet the challenge of a rising China. South Korea canceled the signing of two fairly routine but important defense agreements with Japan in June because of public opposition; Lee’s respected national security aide, Kim Tae-hyo, was forced to resign over the controversy.

All this complicates U.S. security policy in the region, says Sean King, senior vice president and Asia specialist at Park Strategies, who splits his time between New York and Taiwan. “It’s never good having your two biggest and most strategically vital regional allies at odds. As much as possible, we want Japan and [South Korea] on the same page to counter common threats, like North Korea and mainland China.”

The extent of the fallout from Lee’s visit and comments is still unclear.

Japan temporarily recalled its ambassador from Seoul and said it will submit the Takeshima/Dokdo dispute to the International Court of Justice (South Korea has to agree before the court takes up the issue). Japanese Prime Minister Yoshihiko Noda may cancel a planned meeting with Lee at the APEC Summit in Vladivostok, Russia, in October. Any chance of signing the two defense agreements postponed in June seems dead for the foreseeable future.

The Takeshima/Dokdo flap comes at a bad time for Tokyo.

Authorities on Thursday arrested 14 activists from Hong Kong, Macau and mainland China who came ashore on the Senkaku Islands, called the Diaoyu Islands by the Chinese; they’ll most likely be deported soon. The arrest of a Chinese fishing crew there in 2010 led to a tense diplomatic standoff between Japan and China, and relations have not improved. Tokyo’s nationalist governor, Shintaro Ishihara, has raised $16 million in a bid to buy the islands from private owners to “protect” them from Chinese encroachment, forcing Noda to announce plans to do the same — with predictable protests from China.

Hard-liners there have since voiced claims to the entire Ryukyu chain, which includes the island of Okinawa — home to about 15,000 Marines and a major U.S. air base. Those claims seem unlikely to be enforced, but add to the cacophony.

Not to be outdone by foreigners, a group of Okinawa residents and family members who survived the horrific battle in the spring of 1945 filed a lawsuit on Wednesday against Japan’s national government. They are seeking $5.5 million in compensation and an apology for their suffering during the nearly three-month battle.

Spitzer is a veteran journalist and defense correspondent, based in Tokyo. He has covered nearly every major U.S. military deployment since Operation Desert Shield and Desert Storm and has made more than a dozen reporting trips to Iraq and Afghanistan.