The Diplomat says:
The Cairo Communiqué (or Cairo Declaration) is regarded as one of the most important documents concluded by the Allies prior to the end of World War II. In particular, it stated that Japan should be stripped of all territories it had taken in the Pacific and that it should return Manchuria, Formosa and the Pescadores to China.
Subsequently, however, China suffered division as a result of its Civil War, and the international community could not agree on which side should participate in the San Francisco Peace Conference. The Ryukyus and other islands, including the Senkaku/Diaoyu, were placed under U.S. trusteeship until 1971, when the U.S. decided to return to Japan the power of administration, legislation and jurisdiction over the Ryukyu and Daito islands. The U.S. believed that the agreement included the Senkaku/Diaoyu Islands. For its part, China decried the deal, but elected to shelve the dispute and maintain the status quo, at least until the recent crisis.
