2008 – the last chance for a Cyprus deal?

Diplomats and politicians are gearing up for a new push in 2008 for a peace agreement on the divided island of Cyprus. Presidential elections planned for February in the Republic of Cyprus are seen as providing a potential springboard to re-launch negotiations. Many observers warn that this could be the last chance for a deal.

European Commissioner foe enlargment Olli Rehn believes that a comprehensive settlement of the Cyprus problem should be the goal in 2008. "It is essential after the elections, whoever wins, that the UN reactivates its activities… for negotiations," he said.

Ban Ki-Moon, the United Nations Secretary-General, agrees. But he warned last month of "a lack of political will to fully engage".

Both the UN and the EU got their fingers burnt in 2004 when the so-called Annan Plan was accepted in a referendum by the Turkish Cypriots but rejected by 75% of Greek Cypriots, leading to Cyprus joining the EU as a divided island. Today commentators emphasise that the two communities must provide the political lead for any new talks.

The first round of the Greek Cypriot presidential elections is on 14 February with a second vote a week later. There are three main candidates: Tassos Papadopoulos, the incumbent, of the Democratic Party, Dimitris Christofias, secretary-general of Akel, the communist party, and MEP Ioannis Kasoulides, a former foreign minister from the centre-right Democratic Rally (Disy).

It is expected that either Christofias or Kasoulides would bring new commitment and flexibility to fresh negotiations. But Erato Kozakou-Marcoullis, the foreign minister, insists that Papadopoulos is committed to negotiations. "Of course we are ready to do a new deal with full negotiations - and one that is based on a bizonal, bicommunal federation," she said.

Kozakou-Marcoullis blames Turkey for the lack of progress. "Turkey is now openly promoting a two-state solution," she said. She also said it was the fault of Turkish Cypriot leader, Mehmet Ali Talat, that the so-called 8 July agreement from 2006 - a UN-sponsored deal promoting talks on ‘daily life’ and more substantive issues - had gone nowhere. Opinion polls show the three candidates neck and neck - with Papadopoulos slightly ahead with 31%, Christofias 30% and Kasoulides 29%. The polls also suggest that Christofias would be more likely to beat Papadopoulos in a second round run-off than Kasoulides.

But one UN diplomat put the blame on both sides: "There is a lot to indicate the leaders of the Republic of Cyprus are not as anxious as they should be in efforts to resume negotiations. But the same goes for the Turkish side."

Ozdil Nami, a Turkish Cypriot member of parliament, said that action was needed by the EU and UN to end Turkish Cypriot isolation, "as promised in 2004". If not, said Nami, "you shouldn’t be too optimistic on the outcome of [new] talks under a UN umbrella".

Toumazos Tsielepis, a member of Akel’s central committee, said that new talks hang on the election outcome. He pointed out that Christofias’s approach does differ from Papadopoulos’s despite their parties having been coalition partners until a year ago. And, unlike Kozakou-Marcoullis, Tsielepis accepts that the contents of the rejected Annan Plan cannot be entirely ignored. "There is a 30-year history of negotiations and we cannot start from an absolutely new basis," he said.

Christos Stylianides, a member of parliament from Kasoulides’s Disy party, described the current situation as a deadlock. Disy was the only major Greek Cypriot party to argue for a ‘Yes’ vote in 2004 but Styliades warned that "new symbols and new words" are needed for the Annan Plan. Whoever wins, EU and UN diplomats predict a flurry of activity in March or April. Rehn says that he hopes the UN will appoint a new special envoy.

But some in the EU are worried about the interaction between Cypriot negotiations and the EU’s accession talks with Turkey, which has 35,000 troops in the north of the island. One Turkish Cypriot official said: "If you want progress, then Cyprus and Turkey go hand in hand. Turkey should have a European perspective."

The Turkish government backed the Annan Plan in 2004 but according to one European diplomat, "Turkey and the Turkish Cypriots see very few incentives to move".

The biggest challenge lies in convincing the Turkish and Greek Cypriot communities to live together again after almost 35 years of division. Opinion polls show that a growing number on the Greek Cypriot side no longer want reunification. Disillusion seems to be setting in, especially among young people.

The UN is considering sending in a high-level assessment team after the election, said a UN diplomat."They might sit down with the two leaders, whoever they are, and say ‘look guys, it’s now or never’."

Few people want to mention the possibility of a two-state solution if a deal is not reached. "A two-state solution…is not a good solution from the EU point of view," said one EU official.

• Kirsty Hughes is a London-based analyst.

Diplomats and politicians are gearing up for a new push in 2008 for a peace agreement on the divided island of Cyprus. Presidential elections planned for February in the Republic of Cyprus are seen as providing a potential springboard to re-launch negotiations. Many observers warn that this could be the last chance for a deal.