"Discussions on territory began today, this is unprecedented, and talks on this issue will continue on Wednesday in greater depth," reliable sources was quoted as saying.

The United Nations has set Feb. 28 as a target date for an overall Cyprus solution.

In the context of the UN-sponsored direct talks, the two sides met to see if any changes need to be made in a plan presented by UNSecretary-General Kofi Annan last December.

The plan stipulates the island's reunification with 28.5 percent of the territory under Turkish Cypriot administration and the rest under Greek Cypriot administration.

This is against the backdrop of the current 37 percent of the territory being controlled by Turkish Cypriots.

Denktash has therefore raised serious concerns about this arrangement, saying thousands of people will have to be resettled.

He previously insisted on recognition of his breakaway regime in northern Cyprus before any talks on territory.

Cyprus has been divided into the Greek Cypriots-dominated south and the Turkish Cypriots-controlled north since 1974, when Turkey invaded and occupied the northern part of the Mediterranean island after a failed pro-Athens coup.

(Xinhua News Agency February 4, 2003)