Cyprus' president says talks aimed at reunifying the ethnically divided Mediterranean island could conclude in a peace deal this year.

Still, President Nicos Anastasiades is warning against undue haste, saying time is needed to overcome the remaining difficulties. He told The Associated Press on Friday that a "euphoria" being whipped up that the island is on the verge of a peace accord is mistaken and does not benefit the negotiations.

Anastasiades said the cost of reunification will be high and donations from other countries in combination with low-interest loans will be needed to finance peace.

But he added that a Cyprus peace deal would allow Turkey to fulfill its vision of becoming a key conveyor of natural gas to Europe.