Athens/Nicosia - Greek Cypriot President Dimitris Christofias said Friday that the key to finding a solution to reunify the divided Mediterranean island lies with Turkey.

Rival Greek and Turkish Cypriot leaders launched new round of UN- led direct negotiations in September 2008 following a four-year stalemate.

"Our aim is to solve the Cyprus problem, but we have said many times that the key for a solution is Turkey," Christofias told reporters, adding Turkey "must move from its intolerant position."

The eastern Mediterranean island has been split since 1974 into a Greek Cypriot south and Turkish Cypriot controlled north. Turkey invaded the northern third of Cyprus in response to a short-lived coup initiated by the military junta then ruling Greece.

For decades efforts to find a solution have failed, most recently in 2004 when former president Tassos Papadopoulos led the Greek- Cypriot rejection of a UN reunification plan in a referendum.

Turkish Cypriots, on the other hand, had voted overwhelmingly in favour.

Although a settlement has been thwarted for decades, mediators are optimistic that Christofias and Turkish Cypriot leader Mehmet Ali Talat will broker a deal within the year. Any deal will need to be approved by Cypriots in separate, simultaneous referendums.

"The fate of the people of Cyprus hinges on these talks and I mean that," said Christofias, adding that "with the passage of time, each time we fail, the situation on the ground becomes static and more entrenched."

Christofias told reporters that Greek Cypriots had better come to terms with the fact that we will live with the Turkish Cypriots, and "there is no possibility of a pure Greek state".

The two sides have agreed in principle to a settlement based on a federation, but the Turkish Cypriots want a loose federation, while the Greek Cypriots want a stronger central government and more limited regional powers which will prevent the island falling back into partition.

There is disagreement on whether a bi-zonal federation would permit free movement or try to enforce the ethnic majorities in the north and the south.

Christofias said the Greek Cypriot side was facing major problems in the settlement of property claims, one of the most complex chapters in the negotiations.

Local reports said that after weeks of intense negotiations the leaders were unable to broker an agreement on the property issue, which includes the exchange of properties, compensation and how properties might be returned.

Turkish Cypriots are proposing to exchange or compensate properties belonging to Greek Cypriots situated in its territory and to return them under certain conditions.

The Greek Cypriot government, however, argues that the property decision is one that should be made by the owners.

At the time, 160,000 Greek Cypriots and 40,000 Turkish Cypriots were uprooted from their settlements and forced to seek shelter in opposite ends of the island.

This has led to property disputes where thousands of individuals stake a claim to land and homes seized decades ago.

The ongoing conflict in Cyprus also threatens Turkey's aspirations of joining the EU. Ankara started EU entry talks in 2005, but the Cyprus problem has proved a main stumbling block in negotiations. (dpa)