The leaders of the two communities in Cyprus say they are encouraged by the progress they have made so far during discussions to reach a settlement to the 35-year-old division of the Mediterranean island.

But a potential stumbling block lies ahead.

A break in intensive peace negotiations has started ahead of elections in the northern Cyprus.

The Turkish Cypriot leader Mehmet Ali Talat has said, if he loses next month's election, the reunification talks crucial to Turkey's European Union aspirations will grind to a halt.

That view is shared by many analysts who predict an opposition win could lead to the end of the negotiating process, altogether.

However, Alexander Downer, the United Nations special envoy in Cyprus, voices optimism that negotiations would eventually succeed.

"After many meetings that have taken place to date and our discussions on all aspects of the Cyprus problem, we are encouraged by the important progress we have made so far on the Chapters of Governance and Power Sharing, EU Matters and the Economy and we are convinced that with perseverance we shall achieve a comprehensive settlement," he said.

The negotiations to end the division, which started in late 2008, have been described as the 'last chance' for Cyprus peace.

Despite growing pessimism about the future of this peace dialogue, Downer remains upbeat, saying the he believes difference between the two sides can be solved.

"We are convinced that our mutual concern for the common good of the Greek Cypriots and the Turkish Cypriots and our will for a comprehensive solution will soon lead us to an exhaustive discussion of the remaining aspects of the Cyprus problem and the overcoming of the divergent positions soon, so as to achieve a mutually acceptable solution that will be put to separate simultaneous referenda," Downer stated.

However, the future these peace talks is in serious danger, as Talat's hard-line opponent Dervis Eroglu is unhappy with the process.  He wants a two-state solution and not a bizonal, bicommunal federation now being negotiated.

The failure to agree a deal could spell the end to any future U.N. sponsored dialogue and both community leaders have stressed that there is "no plan B".

There are 164,072 eligible voters in northern Cyprus, with seven candidates running in the elections scheduled for April 18th.

The division of Cyprus also poses one of the most difficult issues affecting EU-Turkey relations, with the future of Turkey's accession talks hinging on the successful resolution of the problem.

Cyprus has been divided since 1974, when Turkey invaded the northern part of the island in response to a military coup that was backed by the Greek government.  South Cyprus joined the European Union in 2004 and the self-proclaimed Turkish Republic of Northern Cyprus is only recognized by Turkey.