The United Nations acknowledged failure yesterday in attempts to reach a deal to reunite Cyprus at a European Union summit in Copenhagen but said both sides in the dispute were willing to keep talking.

"Unfortunately, it has not proved possible to achieve a comprehensive settlement. However, the parties' positions have never been closer and agreement seemed possible up until the last minute," UN chief spokesman Fred Eckhard said.

"Whilst it is regrettable that the current opportunity has been missed, both sides have expressed their willingness to continue negotiations," Eckhard said.

The two sides would now be working against a new deadline of February 28, 2003, a date set out by UN Secretary-General Kofi Annan as part of a proposed timetable for a united Cyprus to join the European Union in 2004.

Annan and other world leaders had been pushing hard for an agreement before the end of the two-day Copenhagen summit, which was wrapping up yesterday, so the European Union could invite a reunited Mediterranean island to join the bloc.

In the absence of a settlement, the EU has always said it would take in only the internationally recognized Greek Cypriot part of the island, with which it has been negotiating.

But the talks in Copenhagen collapsed after the ailing Turkish Cypriot leader Rauf Denktash went to Ankara for medical attention rather than to Copenhagen and Turkey failed to win a promise for a quick start to its own EU accession talks.

"The European Union's interest is to delay Turkey and to take Cyprus, to possess Cyprus and to build something like a Christian fortress around Turkey," Denktash told reporters in Ankara just before the Copenhagen talks broke down.

"If there is going to be an understanding between the Turks and Greeks on Cyprus, and God willing there will be, you must accept that implementing this understanding will be incomplete until Turkey is admitted into the European Union," he said.

"We haven't gotten an agreement," Annan told reporters at UN headquarters yesterday morning.

"I hope the work that has been done will not be wasted and that the people of Cyprus - both Turkish and Greeks - will see an advantage in pursuing this effort and bringing it to a fruitful conclusion," Annan said.

The island has been divided since a Turkish invasion in 1974, prompted by a brief Greek-inspired coup in Nicosia.

Only Turkey recognises the self-declared Turkish Republic of Northern Cyprus, which accounts for about 18 per cent of the island's 750,000 population and a third of its territory.

"We were very close, and I was very hopeful that we could get an agreement, and I recall telling (Turkish leader Tayyip) Erdogan that, like an old soccer player like himself, the game is not over until the final whistle, and it looks as if we are not going to get there," Annan said.

EU diplomats later said the two sides could sign a letter of intent to continue negotiating and pledge to reach an accord by February 28.

Eckhard said it was very important for the two sides to now build on the progress made to date in bridging the gap between them "and that all concerned redouble their efforts to achieve a settlement in the coming period."

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