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However, agreement was never reached on the finer details, and the two sides often met deadlock over the following points, among others:

The Greek side:

• took a strong line on the right of return for refugees to properties vacated in the 1974 displacement of Cypriots on both sides, which was based on both UN Resolutions and decisions of the European Court of Human Rights;
• took a dim view of any proposals which did not allow for the repatriation of Turkish settlers from the mainland who had emigrated to Cyprus since 1974; and
• supported a stronger central government.

The Turkish side:

• favoured a weak central government presiding over two sovereign states in voluntary association, a legacy of earlier fears of domination by the majority Greek Cypriots; and
• opposed plans for demilitarisation, citing security concerns.

The continued difficulties in finding a settlement presented a potential obstacle to Cypriot entry to the European Union, for which the government had applied in 1997. UN-sponsored talks between the Greek and Turkish leaders, Glafkos Klerides and Rauf Denkta?, continued intensively in 2002, but without resolution. In December 2002, the EU formally invited Cyprus to join in 2004, insisting that EU membership would apply to the whole island and hoping that it would provide a significant enticement for reunification resulting from the outcome of ongoing talks. However, weeks before the UN deadline, Klerides was defeated in presidential elections by centre candidate Tassos Papadopoulos. Papadopoulos had a reputation as a hard-liner on reunification and based his stance on international law and human rights. By mid-March, the UN declared that the talks had failed.

A United Nations plan sponsored by Secretary-General Kofi Annan was announced on 31 March 2004, based on what progress had been made during the talks in Switzerland and fleshed out by the UN, was put for the first time to civilians on both sides in separate referendums on 24 April 2004. The Greek side overwhelmingly rejected the Annan Plan, and the Turkish side voted in favour. In considering the outcome it is interesting to note that whilst the Turkish colonists (who make up the majority in the occupied north) were allowed to vote, the refugees who had fled Cyprus had no right to vote in a referendum which would ultimately determine their future (their right to return and right to their property).

In May 2004, Cyprus entered divided the EU, although in practice membership only applies to the southern part of the island which is in the control of the Republic of Cyprus. In acknowledgment of the Turkish Cypriot communitys support for reunification, however, the EU made it clear that trade concessions would be reached to stimulate economic growth in the north, and remains committed to reunification under acceptable terms. Though some trade restrictions were lifted on the north to alleviate economic isolation for the Turkish Cypriots, further negotiations have not been a priority. There is now a focus on convincing Turkey to recognise the government of Cyprus, a requirement for Turkish admission advocated most strongly by Cyprus and France.