By Michele Kambas

ATHENS (Reuters) - The best chance in generations to broker a deal over ethnically-split Cyprus collapsed in acrimony early on Friday, throwing the prospect of any reunification into disarray.

A week of U.N.-mediated talks in the Swiss Alps culminated in a "yelling and drama" session, leaving unresolved a conflict that keeps Greece and Turkey at loggerheads and is a perennial obstacle to Ankara's hopes of joining the European Union.

Cyprus's Greek and Turkish Cypriots have lived estranged since a Turkish invasion in 1974 triggered by a brief Greek inspired coup. Major natural gas discoveries in the region over the past decade had added impetus to efforts to secure a deal.


Turkey has 30,000 troops stationed in northern Cyprus and their status in any post-settlement peace deal proved to be the undoing of a process one diplomat lamented came "so, so close" to succeeding.

Diplomats said Turkey had appeared to be offering little to Greek Cypriots wanting a full withdrawal of Turkish troops from the island.

Indications which had emerged on Thursday that Turkey was considering relinquishing intervention rights vanished when the Greek side asked for that commitment in writing.

The Greek Cypriots had indicated readiness to make concessions on Turkish Cypriot demands for a rotating presidency, the other key issue.

"I don't know where it may go from here," a diplomatic source told Reuters.

That source found fault with Turkish Cypriots for being "a bit greedy" and "overplaying their hand", but also Greek Cypriots, who possibly made a tactical error in asking for a written commitment from Turkey relinquishing its intervention rights before a deal had been agreed.

"I just don't think there is a sense of trust there. We were really, really close," the diplomatic source added.

Cyprus talks have collapsed before, most spectacularly in 2004, when Greek Cypriots rejected a U.N. reunification blueprint in a referendum while Turkish Cypriots backed it.

On that occasion, it took several years for the United Nations to re-engage.


Britain, a guarantor power of Cyprus under a convoluted treaty which gave the island independence in 1960, said it was "enormously disappointed".

"Now is a time for calm reflection and consideration of next steps. Our commitment to a deal remains unwavering," a British government spokesperson said.

A downcast Antonio Guterres, the United Nations Secretary-General, who had flown in on Thursday to help clinch a deal, said the world body remained at the disposal of the sides to facilitate any future engagement.

"The conference is closed," he said. "That doesn't mean that other initiatives cannot be developed to address the Cyprus problem."

Quite what that means is unclear. Turkish Foreign Minister Mevlut Cavusoglu said the outcome showed the "impossibility of a solution within the parameters of the U.N. good offices mission".

"There is now no sense in insisting on these parameters," he said.

The Cyprus problem has been on the United Nations agenda for more than half a century.

(Reporting By Michele Kambas; Editing by Gareth Jones)

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