NICOSIA (AFP) – Rival Cypriot leaders have ended the first phase of unification talks, covering governance of the divided Mediterranean island, and will move on to the property topic, they said yesterday.

President Dimitris Christofias, the Greek-Cypriot leader, and Turkish-Cypriot leader Mehmet Ali Talat still disagree over some governance questions but will put these to one side until the end of the peace process.

The two men closed the governance chapter yesterday when they met for the 16th time since fresh peace negotiations were launched on September 3. At their next session, on January 28, they will move on to the prickly property issue.

“I am telling you that not everything is all black,” Christofias told reporters.

“There are issues where we have achieved progress; there are issues that still remain open and those where there is disagreement,” he added, without elaborating. UN special envoy Alexander Downer was also guardedly optimistic over the process arriving at a positive outcome at some stage – although no diplomat will hazard a guess when.

“It wouldn’t be helpful to negotiations to impose a time line – they need to keep making progress gradually but surely.” However, the United Nations believes there is a “real possibility” of reaching a settlement when push comes to shove. “It is an incredibly difficult task, nobody should underestimate how hard it is after so many years and such deep conflict – I remain cautiously optimistic,” said the former Australian foreign minister.

After the Turkish occupation of the north in 1974, some 170,000 Greek Cypriots fled south, abandoning their properties. Many of those properties were distributed among Turkish Cypriots who subsequently sold them on to foreigners, mainly Britons. The EU court’s top legal adviser last month backed the right of Greek Cypriots to reclaim their property in the north.