UN Secretary-General Ban Ki-moon expressed optimism that Cyprus' President Demetris Christofias and Turkish Cypriot leader Derviş Eroğlu were on their way to resolving long-standing differences.
The UN leader, speaking in New York, indicated that leaders of both communities would hopefully reach agreement on outstanding issues in January. In case the summit ends successfully, a follow-up conference would take place with Turkey, Britain and Greece, which are the guarantor powers of Cypriot sovereignty.
"Discussions have been positive, productive and vigorous," Ban told journalists, flanked by the two leaders at the UN headquarters.
"This has given me confidence that a comprehensive settlement can be achieved. Both leaders have assured me that they believe that they can finalise a deal," he said, as quoted by Reuters.
The UN has been trying for years to reunite Cyprus. The conflict has heavily affected EU-Turkey relations (see background).
So far, only one accession chapter (science and research) has provisionally been closed. Eleven more have been opened, but eight remain blocked over Turkey's failure to implement the Ankara Protocol, which opens ports in the Northern part of Cyprus to vessels from the Republic of Cyprus.
Recently Turkey said that it would 'freeze relations' with the EU if Nicosia is given the EU presidency in 2012.
The online edition of the Famagusta Gazette reports on the proposed January summit in rather skeptical terms, saying that such a meeting would be the fifth of its kind since 2008. Previous such meetings took place in Geneva.
"It now looks unlikely that both sides will resolve the outstanding issues in the next six months, before Cyprus takes up the EU Presidency," the independent English-language newspaper reported.
Many hurdles remain
According to sources quoted by Reuters, the two sides did not agree on how to elect a Cypriot president on a rotating basis, and there was no “substantive change in positions” on issues relating to the property rights of displaced persons and territorial adjustments to facilitate a federation.
But Turkish media said the two sides were able to reach an agreement on some other issues.
The daily Milliyet reported that Eroğlu and Christofias had agreed that a new, reunified Cypriot state would use the euro, although the Turkish lira, the valid currency in the Turkish north, would remain in use for a one-year transition period.
The presidency of the central bank of the new Cypriot state would rotate between Turkish and Greek Cypriots. And the impoverished Turkish side would receive funds from the federal state for 13 years to help resolve infrastructure problems.
The Turkish and Greek sides would be equally represented in all levels of the judiciary, but the Greek side would have the majority in the lower house of the Cypriot parliament, controlling 75% of the seats. However, the Turkish side was given guarantees that any bill deemed detrimental to their interests will not pass, Milliyet reported.
Accordingly, either of the two sides will be able to veto a specific bill when half of their lawmakers oppose it.