As international pressure mounted for a breakthrough to the decades-old dispute, UN Secretary General Kofi Annan said he saw "optimistic signals" from both sides that they were ready to break the decades-old diplomatic deadlock. 

The European Union said it was convinced there was a chance of a deal soon that would boost Turkey's own EU membership bid. 

Time is running out for a settlement between Cyprus' estranged Greek and Turkish communities. The internationally recognised Greek Cypriot side enters the EU on May 1.

Turkey's military says it backs a settlement on Cyprus, but in the past has expressed reservations about a United Nations peace plan. It will hold talks with senior ministers at a National Security Council (MGK) meeting beginning at 1130 GMT.

"In the coming days new approaches aimed at reviving the negotiation process will be taken in coordination with the (Turkish Cypriot) government"

Tayyip Erdogan,
Turksih prime minister

"In the coming days new approaches aimed at reviving the negotiation process will be taken in coordination with the (Turkish Cypriot) government," Erdogan said in a televised address to the nation on Thursday evening. 

A Turkish commentator said Ankara was determined not to be seen as the obstacle to a solution when talks resume.

"Both the government and military wings of the MGK are united in the view... that Turkey should not be the side which flees the (negotiating) table," said Fikret Bila, a columnist with Milliyet newspaper. 

Pressure for referendum

He said the main sticking point was UN pressure for the two sides to agree a date for a referendum on a plan before talks resume. The Greek Cypriots have made clear they are not prepared to set a date and Turkey was of the same view, he said. 

Turkey stations some 30,000 soldiers in northern Cyprus after invading in 1974 in response to a Greek Cypriot coup engineered by a military junta then ruling Athens.

"We are in close cooperation and consultation with military authorities. We have covered a great distance in the efforts being undertaken to develop a common stance," Erdogan said.

A divided Cyprus in the EU threatens to cement the island's partition and wreck Muslim Turkey's bid to join the bloc. 

"A solution of the Cyprus problem would be a clear win-win situation - for Cyprus, Greece, Turkey and Europe as a whole... it is now time for action"

Guenter Verheuge,
EU enlargement commissioner 

A new Turkish Cypriot administration led by a supporter of the UN peace plan has raised hopes talks may be resumed. Only Ankara recognises the self-styled Turkish Cypriot statelet. 

EU Enlargement Commissioner Guenter Verheugen said there was a window of opportunity for a Cyprus solution.

"The status quo would damage everyone, whereas solution of
the Cyprus problem would be a clear win-win situation - for
Cyprus, Greece, Turkey and Europe as a whole... it is now time for action," he wrote in Britain's Financial Times.

Erdogan is due to meet Annan at the weekend at the World
Economic Forum in Davos, Switzerland before heading to Washington for talks with US President George W Bush.