Optimism over latest Cyprus talks
Talat (left) and Christofias have met many times since September
Mediators in the effort to reunite Cyprus have expressed optimism that a deal may be reached.
"There is a real possibility of reaching a settlement here," said Alexander Downer, the UN's special envoy for Cyprus.
He was speaking as Greek Cypriot leader Demetris Christofias and Turkish Cypriot leader Mehmet Ali Talat held their latest meeting in Nicosia.
They were discussing how power might be shared in a reunited nation.
Cyprus has been split since a Turkish invasion in 1974, that followed a brief Greek-inspired coup in Nicosia.
The north now runs its own affairs in a de facto state only recognised by Turkey.
The south is the officially recognised government, and a full member of the EU.
The leaders of the two sides opened a new peace process in September 2008 and have been meeting regularly.
They did not give any details of the results of their talks on Friday, but Mr Christofias said: "There are issues where we have achieved progress, there are issues that still remain open and those where there is disagreement." The next topic under discussion will be that of property rights. Many Cypriots still claim rights over land they were forced to abandon in 1974.
Mr Downer expressed optimism that the process was on the road to success, though he would not say how long it might take.
"It wouldn't be helpful to negotiations to impose a timeline - they need to keep making progress gradually but surely," he said.
"It is an incredibly difficult task, nobody should underestimate how hard it is after so many years and such deep conflict - I remain cautiously optimistic," he said.