Rune Cannons are a major technological advancement developed shortly before the Island Nations War. They are used in the Naval Combat system introduced in Suikoden IV. The Rune Shells are the amunitions for the Rune Cannons.
It seems that rune cannons were developed by many nations in the years prior to the Island Nations War, including the Scarlet Moon Empire. It is rumored that the fundamental control mechanisms and effects of rune cannons varied between the nations, which is what ultimately led Walter to lead an expedition to the Island Nations to study them.
The Rune Cannons of the Island Nations seem to have adverse effects on the human body. Some have taken it upon themselves in the century following the Island Nations War to seek out and destroy the remnants of this technology.