By Michele Kambas
NICOSIA (Reuters) - Greek and Turkish Cypriots have reached a critical juncture in negotiations to end the decades-old division of their island and only a small number of issues remain to be resolved, the United Nations' envoy for Cyprus said on Thursday.
Cyprus has been split on ethnic lines since 1974, when Turkish troops invaded the north of the island in response to a short-lived coup by Greek Cypriot militants seeking union with Greece.
The problem transcends the small island of one million inhabitants, keeping NATO allies Greece and Turkey at loggerheads and holding back Ankara's ambitions of joining the European Union.
"We are at a crossroads," UN envoy Espen Barthe Eide told Reuters in an interview.
"I think the leaders know that we are at the crossroads and at the crossroads you have to take the right turn, or the alternative is the wrong turn," he added.
Eide, a former Norwegian foreign minister, has been overseeing the talks between President Nicos Anastasiades, the Greek Cypriot leader, and Turkish Cypriot leader Mustafa Akinci for about two years.
Eide and his team facilitate the discussions between Anastasiades and Akinci to reunite the island under a federal umbrella of two semi-autonomous zones.
He said there was "no doubt" that the two had come closer to a solution than ever before. But he was more cautious when asked whether he thought a peace plan could be agreed by the two sides and then put to a popular vote in a referendum this year, saying that depended on the leaders.
"I believe its possible. Whether it will happen, I think I will remain open. It's doable."
"There are a relatively small number of outstanding issues, the vast majority is done," said Eide, whose office is within the compound of now-abandoned Nicosia airport, the scene of some of the fiercest fighting of the 1974 war.
Although the number is small, they are significant, he added.
Eide said the issues that still require resolution include finalizing the nature of the presidency that will govern Cyprus, a final deal on territorial adjustments, some property-related questions and security.
Greece, Turkey and Britain are guarantor powers under a 1960 treaty that granted the former British colony independence. It was cited by Turkey as a basis for the 1974 invasion, and Greek Cypriots and Greece want the system dismantled. Turkey and Turkish Cypriots want the system to remain intact.
"On that one I am quite optimistic, that's within reach," Eide said on the prospects of a deal on security.
Although there is no timeframe for a settlement, Eide said it was understood that the process could not go on indefinitely.
"There is no time limit ... but there is a shared understanding that we do not have oceans of time and that there is no time like the present."
(Editing by Gareth Jones)