Cyprus U.N. talks continue under blackout

UNITED NATIONS, Sept 18 (Reuters) -- Proximity talks for a settlement over divided Cyprus continued at the United Nations on Monday with the sides apparently yielding little on entrenched positions they have held for years.

Turkish Cypriot leader Rauf Denktash again issued a call for a confederation as a settlement to the dispute dividing the island, an idea bitterly opposed by Greek Cypriot.

Denktash told reporters he was seeking a settlement with the Greek Cypriots on the basis of two states.

"Two states, agreeing to live in peace, to cooperate and project Cyprus as one Cyprus in certain agreed areas like foreign affairs and so on," he said after meeting with U.N. special advisor Alvaro de Soto.

Indirect "proximity talks" between the Greek and Turkish Cypriot communities have been held on and off since December 1999. The aim is to get long-stalled direct talks between the two sides going again.

The last face-to-face meeting between President Glafcos Clerides, the Greek Cypriot leader, and Denktash was held in 1997.

Denktash heads a Turkish Cypriot breakaway state in north Cyprus. The statelet is recognized only by Ankara, which invaded the territory in 1974 after a brief Greek Cypriot coup engineered by the military then ruling Greece.

Clerides, whose government is recognized internationally as the only legitimate authority on the island, has ruled out a two-state settlement which would, effectively, cede sovereignty of the Republic to Denktash's breakaway state.

Denktash position is that Greek Cypriots usurped sovereignty in 1963, when a government in which both communities participated collapsed amid violence.

Clerides counters that the sovereignty of the Republic, ceded when Britain relinquished its control over the former colony in 1960, is indivisible.

Earlier Clerides also met with de Soto, but was tight lipped on his discussions in keeping with a media blackout which has shrouded the talks in secrecy.

Inhabited by ethnic Greeks and Turks, the communities have lived estranged since Turkish forces invaded Cyprus's north in 1974 after a brief coup instigated by the military junta then ruling Greece.

Described as one of the toughest nuts to crack in world diplomatic affairs, a small army of mediators has managed to achieve little to ease the logjam. However diplomats are optimistic that a recent thawing in relations between Greece and Turkey and the European Union aspirations of both Nicosia and Ankara could turn that around.

Clerides returned to the proximity talks last Friday after the discussions were delayed for more than two days. Greek Cypriots were angered at a U.N. statement at the opening of talks on September 12 that seemed to suggest their government status would be diminished to equate it with the Turkish Cypriot state.

He was later coaxed back after U.N. assurances it was not poised to recognise Denktash's statelet.

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