The assistance programme is part of a $30.5 million aid package that Washington earmarked for the Turkish Cypriots last year as a reward for the strong "yes" vote they gave to a UN reunification plan in April.

The State Department on Friday announced that a US business delegation accompanied by an Ankara-based US diplomat would visit north Cyprus to boost business opportunities.

"Closing the economic gap between the sides will help pave the way toward a sustainable settlement," US ambassador Michael Klosson said.

US plan

Under the US initiative, Washington will provide expertise and technical assistance to Turkish Cypriot entrepreneurs to help them find new markets and identify new business opportunities.

"We plan to work with the banks and business community to help ensure that credit is readily available to small and medium Turkish Cypriot businesses."

The island's Greek Cypriot majority rejected the UN plan for reunification, ensuring that a divided island joined the European Union on 1 May and leaving Turkish Cypriots without the full benefits of membership.

Cyprus has been divided since 1974, when Turkey occupied the northern third in response to an Athens-engineered military coup aimed at uniting the island with Greece.