A key United Nations envoy has said that the prospects to reunify ethnically divided Cyprus have "perhaps never been better."

Alexander Downer said that he is encouraged by what he describes as the "sincere commitment" of rival Greek and Turkish Cypriot leaders to reach a peace deal.

Downer said on Tuesday that a renewed peace process by Greek Cypriot President Dimitris Christofias and Turkish Cypriot leader Mehmet Ali Talat looks promising.

But he acknowledged difficult talks ahead, adding that the UN would be as helpful as it could be to the process.

Cyprus was split into a Turkish Cypriot north and a Greek Cypriot south in 1974. Christofias and Talat plan to start historic reunification talks on September 3, 2008.