Mr Annan will on 28 February invite the leaders of the Greek and Turkish Cypriot communities to a meeting on 10 March at the Hague, where they will be asked to give their final answer. Earlier in the week, Mr Annan held talks with Turkish Cypriot leader Rauf Denktash and Greek Cypriot leader Tassos Papadopoulos in a bid to make them accept the deal.
"If they say yes [on 10 March] to a 'foundation agreement', it will pave the way for simultaneous referenda" in the two communities, a source close to the talks said. "If the answer is no, it stops there".
The treaty on Cyprus' accession to the European Union is scheduled to be signed on 16 April. Failure to reunite the island would mean that only the internationally recognised Greek-run part would be able to accede.