U.N. says Cyprus deal possible in months

Greek Cypriot leader, President Demetris Christofias (L) and Turkish Cypriot leader Dervis Eroglu (R) shake hands in front Former Australian foreign minister and present UN special envoy for Cyprus Alexander Downer before a U.N. sponsored social event in the buffer zone bisecting the Cypriot capital of Nicosia, May 25, 2010.

NICOSIA (Reuters) - The United Nations said on Wednesday it believed a peace deal on ethnically divided Cyprus could be brokered within months, healing a decades-old rift that threatens Turkey's hopes of joining the European Union.

The U.N. sounded the unusually upbeat note as leaders of Cyprus's estranged Greek and Turkish communities resumed peace talks after a two-month hiatus for elections that were won by a Turkish Cypriot nationalist.

"The international community is committed to continuing its support for this Cypriot-led process. I truly believe that you can reach an agreement in the coming months," U.N. Secretary-General Ban Ki-moon said in a statement to Turkish Cypriot leader Dervis Eroglu and Greek Cypriot leader Demetris Christofias.

The United Nations has typically shied away from defining a time frame for the conclusion of Cyprus peace talks. Success has eluded a small army of mediators for decades. But in the statement, read by U.N. Cyprus envoy Alexander Downer to the two sides, Ban said: "The peace process is at an important point. A settlement is within your grasp and this opportunity must be seized, as time is not on your side."

Cyprus was split in a Turkish invasion in 1974, triggered by a brief Greek-inspired coup.

The conflict is harming Turkey's bid to join the European Union. Greek Cypriots represent the island in the 27-nation bloc and have the power to veto Turkish entry.

Peace talks had been interrupted for Turkish Cypriot elections, won by Eroglu in April. A perceived hard-liner, he has attempted to assuage Greek Cypriot concerns and says he plans to continue from where talks were left off by Mehmet Ali Talat, his moderate predecessor.

The sides are attempting to re-link Cyprus as a federation with broad power-sharing, but there are a mountain of disputes ranging from how to govern to territorial swaps and the rights of thousands of displaced property owners.

Turkey has about 30,000 troops stationed in the breakaway Turkish Cypriot state in northern Cyprus.

The United Nations acts as a facilitator in talks, held at a compound straddling a buffer zone between the two sides. The Cyprus conflict is one of the longest-running issues on the U.N. agenda, and its peacekeeping operation on the island is one of the world's oldest.

"This is not a zero-sum game. It is possible, and indeed necessary, to arrive at a solution that clearly benefits both Greek Cypriots and Turkish Cypriots," Ban said.

(Writing by Michele Kambas, editing by Mark Trevelyan)