Rival Cypriot leaders agreed Monday to resume UN-brokered peace talks on May 15 in a fresh bid to reunify Cyprus after four decades of division, the United Nations announced.

UN envoy Espen Barth Eide made the announcement after hosting a dinner for President Nicos Anastasiades, the Greek Cypriot leader, and his Turkish Cypriot counterpart, the newly-elected Mustafa Akinci.

The meeting, held in the UN-patrolled buffer zone of Nicosia, was held in a "positive atmosphere", the envoy said.

The two leaders had agreed it was "important to use the momentum created and this new opportunity to move forward without delay."

Eide said the leaders agreed to meet on Friday to have a "general exchange of views" and discuss how the negotiations should proceed.

The Norwegian diplomat said it was a "unique opportunity" to be grasped.

The two hours of dinner diplomacy was part of efforts to kick-start reunification talks, which have been suspended since October.

It was the first time the two leaders have met since Akinci –- seen as a moderate -- was elected Turkish Cypriot leader last month.

Anastasiades tweeted: "I hope that the conditions for a substantive dialogue will be created, which will lead to the reunification of our country."

"It was a positive meeting, it was a good beginning," tweeted Akinci.

Akinci, a longtime champion of reunification, was elected president of the breakaway Turkish Republic of Northern Cyprus on April 26, defeating nationalist incumbent Dervis Eroglu.

Anastasiades has said Akinci's election had renewed hopes for a settlement.

Before the dinner, held at the Ledra Palace hotel that serves as a barracks for British UN peacekeepers, a few hundred people turned up to demonstrate in favour of a peace accord.

The conservative Greek Cypriot leader also has peace credentials, having supported a 2004 UN settlement blueprint that 75 percent of Greek Cypriots rejected in a referendum.

Since then there has been little progress achieved with the thorny issues of territorial adjustments, security, property rights and power sharing the main stumbling blocks.

A UN-monitored ceasefire line has divided the island since 1974 when Turkish troops occupied its northern third in response to an Athens-inspired coup seeking union with Greece.

The Turkish Cypriots, who had already pulled out of government institutions in the face of communal violence in 1963, declared their breakaway state in 1983.

But it is recognised only by Turkey, which provides around a third of its budget.

The Greek Cypriots pulled out of the UN-brokered talks last October in protest at Turkish exploration for oil and gas off the island's coast.

But they announced in April that they would return to the negotiating table after the Turkish Cypriot election.

Both Ankara and Washington voiced hope last week that 2015 could finally be the year that Cyprus is reunited.