Military

DATE=2/13/2004

TYPE=CORRESPONDENT REPORT

TITLE=U-N / CYPRUS FRIDAY (L-O)

NUMBER=2-313080

BYLINE=PETER HEINLEIN

DATELINE=UNITED NATIONS

CONTENT=

VOICED AT:

INTRO: U-N Secretary General Kofi Annan is giving the leaders of Turkish and Greek Cyprus a take-it-or-leave-it ultimatum on his proposal for a quick reunification of the divided island. From U-N headquarters, Peter Heinlein reports three days of tough negotiating have produced only deadlock.

TEXT: The rival Greek Cypriot and Turkish Cypriot delegations sat in separate rooms in the secretary general's offices until early Friday morning. In the previous days of negotiations, mediators during that session were shuttling between the two sides, trying to smooth over differences that have festered during the 30-year division of Cyprus.

Diplomats from Greece and Turkey joined the process late in the evening, as did diplomatic observers from the United States and Britain.

But the 12-hour marathon session ended without agreement on reunifying Cyprus.

After a brief break for sleep, the parties are returning, for what is expected to be a final session in New York. Secretary General Annan is presenting the two sides with a prepared communiqué setting out ground rules for further talks in Cyprus.

Turkish Cypriot leader Rauf Denktash told reporters he and his Greek Cypriot counterpart, Tassos Papadopoulos, will be asked to say "yes" or "no." If the answer is yes, three-way talks would continue as early as next week, probably in Cyprus, with veteran mediator Alvaro De Soto representing Mr. Annan.

Diplomats close to the negotiations say, however, that the New York meetings could drag on if either side chooses to say neither "yes" nor "no" but maybe.

The main area of dispute in the talks is said to be the role of the European Union in the Cyprus segment of the talks. The Greek Cypriots have asked for E-U participation, but the Turks have rejected the idea.

The secretary-general's proposal calls for the rival Cypriot leaders to complete reunification talks by the end of March. After that, he would be authorized to fill in the blanks on any unresolved issues.

The completed deal would then be put to separate referenda in the Greek and Turkish parts of island in April. That would allow a unified Cyprus to join the European Union May first, if the referenda pass.

If the process breaks down, only the internationally recognized Greek Cypriot state would join the E-U, further deepening Turkish Cyprus's isolation.

NEB/NYC/pfh/KL