By Soo-hyang Choi

SEOUL (Reuters) - The bereaved families of 10 South Koreans who won court cases over being forced to work under Japanese colonial rule have accepted compensation proposed by Seoul as it seeks to mend ties with Tokyo, South Korea's foreign ministry said on Thursday.

South Korea announced last month that its companies would compensate people forced to work under Japan's 1910-45 rule, as it pushes to end a spat that has undercut U.S.-led efforts to present a unified front against China and North Korea.

Japan has said the matter was settled under a 1965 treaty.

Those who have agreed to accept the government plan are bereaved families of 10 deceased victims among 15 in cases where South Korea's Supreme Court ordered Japanese firms to pay reparations in 2018.

The families of two deceased victims as well as the only three victims involved in the cases still alive have all rejected the government proposal.

"The bereaved families of 10 victims expressed hope that this issue be promptly resolved, and agreed to accept the compensation under the government plan," the foreign ministry said in a statement.

South Korea will continue efforts to seek understanding from the victims and their families, the ministry added.

The South Korean proposal has been hailed as "groundbreaking" by U.S. President Joe Biden following a deterioration in Japanese-South Korean relations to the lowest point for decades in the wake of the 2018 rulings.

The March announcement was followed by South Korean President Yoon Suk Yeol's visit to Tokyo for a meeting with Japanese Prime Minister Fumio Kishida. The two leaders agreed to put aside their countries' difficult shared history and work together to counter regional security challenges.

(Reporting by Soo-hyang Choi; Editing by Mark Heinrich)