GENEVA (Reuters) - A peace deal in Cyprus is difficult but possible, a senior United Nations envoy said on Monday as leaders of the ethnically split island met for crucial reunification talks in Geneva.

Espen Barth Eide, a former Norwegian foreign minister, also said the United Nations would only facilitate, and not arbitrate in talks between Greek and Turkish Cypriots.

The island was split in a Turkish invasion in 1974 triggered by a brief Greek inspired coup.

"The leaders are showing a lot of courage, a lot of will," Eide told a news briefing. "It's going to be difficult but it's possible."

Greek Cypriot leader Nicos Anastasiades and Turkish Cypriot leader Mustafa Akinci are discussing power-sharing, territorial adjustments and security issues as part of reuniting Cyprus under a federal umbrella.

"We are now in the final moment. We are now in the moment of truth," Eide said.

(This version of the story corrects "not impossible" to "possible")

(Reporting By Tom Miles and Michele Kambas)