European Union (EU) leaders and Turkey agreed on Friday on a compromise formula to overcome differences over Turkish recognition of the Greek Cypriot government as a condition for opening EU membership talks, diplomats said.

The diplomats said the agreement called for Turkey to issue a written statement promising to sign an accord extending its customs union to the 10 new EU members, which include Cyprus.

Turkey would sign the accord before the start of EU membership negotiations on October 3. EU officials said signing the document would grant effective recognition to the Greek Cypriot-led government on the divided island.

There was no official comment from either the EU or the Turkish delegation, but diplomats said a formal announcement was expected later Friday.

The EU wanted the Turks to initial the accord before the close of the two-day summit Friday and then sign the customs agreement before the start of the talks. But Ankara did not want to be rushed into any form of recognition of Cyprus.

Differences over Cyprus, split between a Greek Cypriot south and Turkish Cypriot north, have long been a source of irritation between Turkey and Western Europe. Turkey is the only country that recognizes the Turkish Cypriot state declared in the north; and it does not recognize the official government in the south.

Turkish Foreign Minister Abdullah Gul told reporters on Thursday that recognition of Cyprus -- "either directly or indirectly" -- was "out of the question."

Membership talks will be "open-ended," meaning they will not automatically lead to membership, although that is the goal.

If the talks fail to lead to full membership, the EU will not turn its back on Turkey and will "anchor Turkey in European structures," according to the draft text.

The draft also makes clear negotiations may be stopped if Turkey backslides and does not push through the economic and political reforms needed to qualify for EU membership.

"The EU opened its door to Turkey... making a balanced offer," Jose Manuel Barroso, president of the European Commission, said on Thursday. "I genuinely believe this is an offer Turkey should be glad to accept."

Some people in the EU fear opening the door to a populous and mostly Muslim country will profoundly alter the bloc's European and Christian character at a time when many Europeans are questioning multiculturalism.

Turkey would become the largest EU member, since its population is expected to surpass Germany's 83 million people by 2020.

That would give Ankara considerable power, as voting within the EU is weighted by population.

Turkey has warned the EU against imposing too many onerous conditions, and many Turks worry membership would threaten their own Muslim traditions.

Even if membership talks begin, it could take 10 to 15 years for Turkey to join.

Admitting Turkey would extend the EU's borders to the frontiers of Syria, Iraq and Iran, bringing in millions of Muslim citizens at a time when Europeans are uneasy about having so many Muslims within their own countries.

Turkey's stock market rose to a record high Friday amid hope that the country would start membership talks with the EU after overcoming an impasse over Cyprus.

Istanbul's stock market fell slightly in morning trading as traders waited for the outcome of an EU summit in Brussels on starting membership negotiations.

(China Daily December 18, 2004)