Talks sponsored by the United Nations over the future of the divided island of Cyprus ended without a breakthrough on Friday.

But UN Secretary General Kofi Annan said he remained confident a deal could still be reached between the leaders of the island's divided Greek and Turkish communities.

The UN is proposing reunification of the island on a federal basis.

Greek Cypriots want the island tightly reunited under the internationally recognised government they control.

But Turkish Cypriots oppose the idea and want recognition for the self-declared state of Northern Cyprus, which is currently recognised only by Turkey.

The island has been divided since 1974, when an abortive coup by supporters of a union with Greece led to an invasion by Turkey.

EU expansion plans

Mr Annan met both the Turkish Cypriot leader, Rauf Denktash, and his Greek Cypriot counterpart, Glafcos Clerides, for separate meetings in Paris on Friday. The three men then had lunch together.

After the meetings, Mr Annan issued a statement saying: "I continue to believe that the gaps dividing the parties can be bridged".

He conceded that "serious differences remain" but that "the elements of a comprehensive settlement that would meet the basic needs of both sides do, in fact, exist."

Mr Annan, who declined to provide details on the substance of the talks, said he would meet again with the rival leaders in New York early in October.

Diplomats said a breakthrough was not expected ahead of the Turkish election on 3 November.

But there is pressure for an agreement to be reached before an expected end-of-year deadline for the EU to accept Cyprus as a member state in the next round of its expansion plans.

Turkey has threatened to annex the north if the EU, as expected, accepts Cyprus.

But Greece has warned that if Cyprus is refused entry, it will veto the entire expansion programme, affecting the nine other prospective members hoping to join in 2004.