"A new historic opportunity for the resolution of the Cypriot problem has just opened up with the conclusion in New York a little while ago of the process aiming at resuming negotiations," he told reporters.

"That leaves us very optimistic and very hopeful for the future" of the island, he said.

Negotiations will resume on February 19 in Cyprus where Annan's special envoy Alvaro de Soto will be present, he said.

Turkish Cypriot prime minister Mehmet Ali Talat, quoted by the Turkish Cypriot news agency TAK from New York, said earlier that his country accepted talks resuming under the auspices of the Annan plan.

"Talks will be under the auspices of the Annan plan," said Yannitsis, confirming that Annan will arbitrate over any potential sticking points as a last resort.

The European Commission will play a "constructive role in the talks," the Greek foreign minister said.

New negotiations on how to bring the two sides together started at the United Nations headquarters in New York on Tuesday. A political breakthrough is needed to allow the whole island to join the EU as planned on May 1.

Greek Prime Minister Costas Simitis said he hoped that the Turkish Cypriots would now negotiate in good faith.

The agreement in New York "is a decisive turning point for a final solution on Cyprus", he added according to a written statement, saying it created conditions for a negotiation "in a framework excluding delays".

"I hope that the Turkish Cypriot party will this time negotiate in good faith," he added.

Turkish Cypriot leader Rauf Denktash was blamed for the breakdown in talks last March by refusing the Annan plan.

And Simitis said he was "counting on the stated wish of the European Union to contribute to the drawing up of the final agreement".

The negotiations will aim to enable the island to be reunified before May 1 when Cyprus will be among 10 countries to join the 15-member European Union.

If there is no reunification deal, only the internationally-recognized Greek Cypriot south of the island will join.

Cyprus has been divided since 1974, when Turkey occupied the northern third of the island in response to a Greek Cypriot coup aimed at uniting the island with Greece.AFP