By Michele Kambas and Simon Bahceli
NICOSIA (Reuters) - Leaders of Cyprus's Greek and Turkishcommunities agreed on Friday to relaunch reunification talksand to open a barricaded street in Nicosia that symbolises theisland's division.
It was the first meeting between Greek Cypriot leaderDemetris Christofias and Turkish Cypriot leader Mehmet AliTalat since Christofias was elected to the Cypriot presidencylast month and raised hopes for reviving talks that are alsocrucial for Turkey's bid to join the European Union.
"The leaders have agreed to meet three months from now,"said Michael Moller, the U.N. special representative in Cyprus,who hosted the meeting between the two men at a U.N. controlledterritory splitting Nicosia, Cyprus's war-divided capital.
"The leaders have also agreed Ledra Street, as soon astechnically possible, should open and function," he added.
Greek and Turkish Cypriots have lived separately since aTurkish invasion in 1974 in response to a brief Greek-inspiredcoup. Peace efforts collapsed in 2004 when Greek Cypriotsrejected a U.N. reunification blueprint accepted by TurkishCypriots, and soon afterwards joined the European Union alone.
The European Union welcomed the result. "I look forward towalking across the Green Line at Ledra Street myself in thenear future," said Enlargement Commissioner Olli Rehn.
Analysts say this could be the last chance to end thedivision. Diplomats fear an enduring stalemate would entrenchpartition, harming Turkey's EU entry hopes and relations withNATO partner Greece.
Moller said the two sides had agreed to set up committeesto discuss issues and the two leaders would meet in threemonths to examine progress and then start fully-fledgednegotiations.
"It was the best possible result at this moment," saidpolitical analyst Yannis Papadakis. "They have agreed on theprocess. The opening of Ledra Street, which has been a troublespot for many years, is very symbolic."
Ledra, a main shopping street in the heart of medievalNicosia, has been barricaded for about half a century. The wallwas torn down in recent years but the street remains blockeddue to controversy over military patrols in the area.
Decaying buildings in the buffer zone must be shored up andthe area swept for mines before it can open to the public, aprocess the United Nations say will take 10-15 days.
"It breaks my heart to see these crumbling buildings everyday," said Chysanthos Trokkoudis, a merchant close to thebarricade since 1959. "It's a good first step to open Ledra, itwill help improve relations."
About 150 people gathered at the spot, with banners reading"Open up Ledra" and "End the division". A smaller groupgathered on the Turkish Cypriot side 80 metres (yards) away.
"This barricade is a symbol of division. When it is open,it will be a symbol of peace. We want a united and independentCyprus," said Salih Taskin, 48, a travel agent.
Christofias and Talat were upbeat. "I look forward ... tohaving in three months' time results which will help both of ushave a dialogue under the auspices of the Secretary-General,"Christofias told reporters. "We have to be optimistic anywayand we agreed that we shall work together in good will."
Former president Tassos Papadopoulos, defeated last month,made little progress towards reunification in talks with Talat.Christofias has maintained closer ties with Turkish Cypriotsand, like Talat, has a background in leftist politicalactivism.
"This is a new era we are starting for the solution of theCyprus problem. Our target is to find a comprehensive solutionto the Cyprus problem as soon as possible," Talat said.
The Greek Cypriots in the south represent Cyprus in theEuropean Union and have the right to prevent Turkey fromjoining the bloc.
(Additional reporting by Stelios Orphanides, Writing byDina Kyriakidou; Editing by Janet Lawrence)