Nicosia - Cypriot leaders launched a new round of peace talks on Wednesday after years of stalemate aimed at ending a decades-old conflict and reuniting the divided eastern Mediterranean island.

Greek Cypriot President Dimitris Christofias and Turkish Cypriot leader Mehmet Ali Talat met in the UN buffer zone dividing the capital Nicosia and will hold talks in the presence of newly appointed UN envoy for Cyprus, former Australian foreign minister Alexander Downer.

The two leaders of the ethnically divided island agreed in July to relaunch fully fledged peace negotiations on September
3, ending a four-year deadlock in efforts to bring the two communities together.

Peace talks have been deadlocked after former president Tassos Papadopoulos led the Greek-Cypriot rejection of a UN reunification plan in a 2004 referendum.

Turkish Cypriots had overwhelmingly voted in favour.

With newly elected Christofias in office, expectations are running high for a breakthrough in efforts to reunite the island, which has been divided since 1974 when Turkey invaded the northern third in response to an Athens-led coup to annex the island to Greece.

"We hope that we will expand efforts to reach a comprehensive settlement for this long-standing problem.

"The groundwork seems to be OK this time around," Turkish Cypriot Government spokesman Hasan Erkacica told Deutsche Presse-Agentur dpa in a telephone interview.

The two sides have agreed in principle to reunite the island as a federal state composed of two constituent states, which would guarantee the equality of both communities.

Both sides will focus on the complex list of issues dividing the two sides, meeting at the site of the abandoned, bullet-riddled former airport in the UN buffer zone, ranging from territory and property disputes from more 250,000 people who have lost their homes to future governance of the island.

Christofias and Talat said any agreed solution would be put to separate, simultaneous referenda in the north and the south. (dpa)