Cyprus peace talks offer "best chance" of deal: U.N.

NICOSIA (Reuters) - Peace talks on ethnically- divided Cyprus this September offer possibly the best chance in years for a deal that has been eluding the island for decades, a senior United Nations envoy said on Tuesday.

Greek Cypriot leader Demetris Christofias and Turkish Cypriot leader Mehmet Ali Talat are to launch comprehensive reunification talks on September 3, raising hopes of ending a deadlock that has been harming the EU ambitions of Turkey.

"Developments over the past months have fostered a genuine sense that prospects have perhaps never been better to achieve a comprehensive settlement," said Alexander Downer, a former Australian foreign minister appointed U.N. special envoy for Cyprus this month.

Downer, on his first trip to Cyprus since his appointment, will oversee the peace talks, though the role of the United Nations is to facilitate and not direct discussions, he said.

Divided in a Turkish invasion triggered by a brief Greek inspired coup, Cyprus has frustrated a long list of mediators attempting to reconcile the island's two communities.

Peace talks had been in limbo since Greek Cypriots in the south rejected a U.N. unification blueprint in 2004, accepted by northern Turkish Cypriots.

The climate has improved dramatically since the election of Christofias in Cypriot presidential elections in February, replacing hardliner Tassos Papadopoulos.

Christofias, a communist whose party has maintained close ties with Turkish Cypriots, is generally viewed as more moderate on reunification.

Since February, the two estranged communities have dismantled a poignant symbol dividing their capital, Nicosia.

Christofias was due to cross to breakaway northern Cyprus on Aug 2 on a private visit to Talat's daughter, who is getting married on August 31, a source close to Christofias said.

It will be only the second time in more than 34 years that an incumbent Greek Cypriot president will have crossed into northern Cyprus.

"Clearly you have two leaders who are sincere in their commitment and their engagement to move forward together towards a comprehensive settlement," Downer said.

(Reporting by Michele Kambas; Editing by Jon Boyle)