A close observer of the talks said yesterday the United Nations negotiating team being led by the Secretary-General, Boutros Boutros-Ghali, had brought the two sides closer to a settlement 'than anybody ever before'.
Under intense pressure from his sponsors in Ankara, Rauf Denktash, the Turkish Cypriot leader, has all but agreed to a new dividing line on the island, that would leave his community with less than 29 per cent of the territory. One of the main issues at hand is whether the Turkish Cypriots hold on to the orange groves around the town of Morphuh, while handing the town to the Greek Cypriots. Turkish Cypriots now hold 37 per cent of the island.
Concessions will be required on the emotional question of the return of Greek Cypriots who fled their homes and businesses when the Turkish army invaded in 1974 to protect the Turkish minority in the north. Mr Denktash has been forcefully informed he will have to make way for those who want to return and claim their property.
President George Vassilliou will have to swallow just as hard, when it comes to accepting the new dividing line of the island, with the Turkish side holding on to some of the most fertile agricultural areas, and to the return of displaced people, which will be on a limited scale and spread over a considerable period.
Other elements in the talks include constitutional arrangements for the proposed federal state of two provinces governed by the respective communities.