By Guy Faulconbridge
LONDON (Reuters) - Cyprus is closer than ever to ending its four-decade-old partition and the two sides could agree on the text of a deal by May, followed by a referendum, a senior Turkish Cypriot official said on Wednesday.
The island's Greek and Turkish communities have lived apart since 1974, when Turkey invaded the north after a brief Greek-inspired coup. The seeds of partition were sown soon after independence from Britain in 1960.
"We are cautiously optimistic. We think we are closer than we have ever been before," Emine Colak, foreign minister in the internationally unrecognized administration in the north, told Reuters in an interview.
"We don’t think the Cyprus problem has got easy – it hasn’t but we think we have a window of opportunity," Colak said. "It is possible and it is desirable to get to at least the major part of the negotiations and the agreed text by May 2016."
New impetus was given to the island's on-off peace process by the election of moderate Mustafa Akinci as Turkish Cypriot leader in May.
On Wednesday, Turkish Prime Minister Ahmet Davutoglu joined a chorus of optimism, telling reporters there was a "window of opportunity" on the Cyprus issue.
Asked if there could be a referendum on unification in early 2016, Colak said: "I wouldn’t think early 2016 but maybe within 2016 – I don’t see any reason why not."
The frozen conflict has been a permanent fixture on U.N. Security Council agendas for at least half a century. Cyprus hosts one of the world's oldest peacekeeping forces, monitoring a 180-km (110-mile) ceasefire line that slices across the eastern Mediterranean island.
Cyprus's partition is a continuing source of tension between Greece and Turkey and an obstacle to Turkey's ambition to join the European Union. The breakaway state in the north is recognized only by Turkey.
"On both sides, the political leadership, the political will is on the side of resolving it this time if we possibly can," said Colak, a 57-year-old human rights lawyer educated at London's School of Oriental and African Studies.
Unifying the island would spur investment, open up the Turkish side to more tourism, allow direct flights from most of Europe to Northern Cyprus and help stem a brain drain from the Turkish side.
On paper, the two sides agree on reuniting Cyprus as a two-zone federation under a federal umbrella. But Colak cautioned there were hurdles that had festered for decades.
There are deep differences on on how the new state would function and the degree of autonomy each side would have. The exact geography of the dividing line is also a difficult issue.
Other obstacles include the property claims of tens of thousands of people displaced in conflict, and Greek Cypriot demands that thousands of Turkish mainlanders who arrived on the island after division should leave.
"We have had some convergence on a lot of the headings so far but I would say we are about halfway, but at the moment there is a very sticky issue and that is property," Colak said. "We think some formulas will be found."
Another issue is how and on what terms a unification deal would be guaranteed by Britain, Greece and Turkey. Colak said the guarantor powers were saying this could wait until the outline of a deal had emerged.
She suggested that postponing Greek Cypriot elections planned for May 2016 would ease the negotiating process.
Colak said some EU member states such as France were still refusing to speak to Turkish Cypriots.
In 2004, Greek Cypriots rejected a United Nations settlement blueprint accepted by Turkish Cypriots. One of the objections of the Greek side was that the deal still gave Turkey a say in the island’s affairs, and that it did not safeguard the right of all internally displaced people to return to their homes.
Colak said Turkey would have to be one of the guarantors.
The cost of unification, thought to be around 16 billion pounds ($24 billion), would be borne by the international community.
So will it really happen? "There are a lot of signs of hope," Colak said.
(Additional reporting by Michele Kambas in Nicosia; editing by Andrew Roche)