Dear Mr. Speaker: (Dear Mr. Chairman:)

In accordance with Public Law 95 - 384 (92 Stat. 739; 22 U.S.C. 2373(c)), I am submitting to you this report on progress toward a negotiated settlement of the Cyprus question. This report covers the period from January through March 1991.

This was a period characterized by developments that hold promise for reopening negotiations, under the aegis of the United Nations Secretary General, for further work on a draft outline for a final settlement. As I reported on January 30, the Secretary General's Special Representative in Cyprus, Ambassador Oscar Camilion, and his Director for Cyprus in New York, Mr. Gustave Feissel, had for several months been meeting with leaders of the two communities to explore elements of the outline on which they might agree.

In support of this process, Mr. Feissel held during January and February a series of discussions with a representative of the Turkish Government. After concluding these discussions, Mr. Feissel traveled to Cyprus during the first week of March where he joined Ambassador Camilion for separate meetings with President Vassiliou and Mr. Denktash.

On March 27 the Secretary General reported orally to the members of the Security Council on the status of his good offices mission on Cyprus. His assessment included the main issues that require further clarification. The Secretary General noted that ``current conditions are favorable. Progress is within reach if all concerned are willing to seize the moment and make their contribution.'' He called for a continuation of the discussions of the last few months in order to resolve outstanding issues, and said that once this was accomplished, it would then be possible to complete the draft outline and invite the two leaders to meet with him again.

On March 28 the President of the Security Council issued a statement in response to the Secretary General's oral report. The statement renewed the full support of the members of the Security Council for the Secretary General's efforts, and encouraged him to continue those efforts. It also urged ``all concerned to act in a manner consistent with resolution 649 (1990), to cooperate fully with the Secretary-General and to continue the discussions that have taken place over the past few months in order to resolve without delay the outstanding issues.''

On the island, other developments contributed to a more positive environment between the two communities. First, on February 12, several Greek Cypriot and Turkish Cypriot political leaders met jointly for the first time in almost a year at the Ledra Palace Hotel in the buffer zone. On March 18 several Greek Cypriot political leaders crossed the buffer zone to north Nicosia to attend an anniversary reception for a Turkish Cypriot opposition political party. Additional intercommunal contacts among political party delegations followed.

Second, on March 21 the Minister of Defense of the Government of Cyprus, Mr. Andreas Aloneftis, announced that his government's defense fund expenditures for 1991 were to be cut in half. This is a welcome development.

With respect to U.S. involvement in the Cyprus issue, I am pleased to report that Secretary of State James Baker met on March 1 with Foreign Minister George Iacovou of the Republic of Cyprus for a thorough discussion of prospects for movement on the Cyprus issue. Foreign Minister Iacovou also met with my Assistant for National Security Affairs, Brent Scowcroft, Assistant Secretary of State Raymond Seitz, and my Special Cyprus Coordinator, Ambassador Nelson Ledsky.

In mid-February Foreign Minister Alptemocin visited Washington to continue a dialogue on Cyprus that he and Secretary Baker had established through an exchange of letters in January. He had meetings with Secretary Baker and me. On March 15, during his trip to Ankara, Secretary Baker discussed the Cyprus question with Turkish President Ozal and Foreign Minister Alptemocin.

On March 23 I discussed the Cyprus issue with President Ozal during his visit to Camp David. At that time Secretary Baker also continued his discussions with the Turkish President. In all of these discussions Secretary Baker and I have had as our firm objective the facilitation of the U.N. Secretary General's good offices mission.

I believe these developments provide hope that we are on the right path to completing a draft outline. I note with pleasure the cautious optimism of the Secretary General that, with the help of the leaders of the two Cypriot communities, the task can be completed within the next few months. The United States will continue to do all it can to facilitate this process.

Sincerely,

George Bush

Note: Identical letters were sent to Thomas S. Foley, Speaker of the House of Representatives, and Claiborne Pell, chairman of the Senate Foreign Relations Committee.