Cyprus peace push to follow bailout

CYPRUS peace envoy Alexander Downer says the UN will launch a new bid for talks on reuniting the island only after it has secured a bailout for its nearly bankrupt economy.

Downer returned to Cyprus for a first meeting with Nicos Anastasiades, the newly elected Greek Cypriot president, before holding talks in the island's north with Turkish Cypriot leader Dervis Eroglu.

"It's my judgment... that Cypriots need for the moment to conclude the negotiations - particularly the president - with the troika" of international lenders, said Downer.

"Those economic issues are bigger economic issues than most countries face. Those economic issues need to be dealt with," the UN envoy told reporters.

Cyprus needs 17 billion euros ($A21.74 billion) to save its Greek-exposed banks and keep its recession-hit economy afloat.

The Australian diplomat said he would be back in April after doing a tour of regional capitals and briefing UN chief Ban Ki-moon on the state of play.

"Next week I'll be in New York; I'll be seeing the secretary general... I think we have an increasingly clear picture about how President Anastasiades wants to take this process forward."

Downer congratulated the president on February's "decisive" election victory but said he was faced with "huge challenges" of turning the economy around.

"That's not our business but suffice it to say we are very sympathetic with the challenges he and the people of Cyprus, more broadly, have to face of an economic nature."

UN-backed peace negotiations are currently in limbo with direct talks put on hold for more than a year after a failure to bridge the gap on core issues of power sharing, property rights and territorial adjustments.

Cyprus was split in 1974 when Turkish troops invaded in response to a Greek-inspired coup in Nicosia aimed at uniting the island with Greece. Only Ankara recognises the authorities in the Turkish-occupied north.

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