A deal to end the 40-year-old Cyprus conflict could happen this year, the Turkish Cypriot leader has said.

Dervis Eroglu said negotiations with Greek Cypriot president Nicos Anastasiades on reunifying Cyprus, which resumed in February after a 20-month stalemate, could produce results.

His comments came after he met United Nations secretary general Ban Ki-moon.

Cyprus was split into a Greek Cypriot south and a Turkish Cypriot north in 1974 when Turkey invaded after a coup by Cypriot supporters of union with Greece. Turkish Cypriots declared an independent state in 1983, but only Turkey recognises it and keeps 35,000 troops there.

Cyprus joined the European Union in 2003, but only the south enjoys membership benefits.

The two sides have been trying to strike an accord for decades, with UN support.

Talks resumed in February after the two leaders took a different approach and agreed on a document outlining key provisions of an envisioned federation.

"Our target remains ... the settlement of the Cyprus problem in the shortest possible time," Mr Eroglu said. "We have the support of the secretary general in this regard. He has been encouraging the both sides."

The Turkish Cypriot leader said the current negotiations were aimed at bridging the remaining gaps between the two sides.

"We'll try to bridge our differences and find a comprehensive settlement in the shortest possible time," he said. "We said a settlement is possible within this year. We can finalise a settlement, and take it to ... separate simultaneous referenda, in 2014."

Outgoing UN envoy Alexander Downer told a farewell news conference on March 27 that Cyprus' bail-out and economic problems could bolster the chances of a peace accord.

He said the country's shrunken economy and high unemployment could get people to focus on the benefits an agreement would bring, such as a potential increase in foreign investment and a tourism influx.

There's "positive momentum" in the talks, Mr Downer said, and a "deal can be done".

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