It was a vicious murder, but the killers may escape punishment, because they crossed a border that most of the world doesn't recognize. In January 2005, Elmas Guzelyurtlu, a Turkish Cypriot businessman living near Nicosia in the southern part of Cyprus, was awoken by intruders. They took him, his wife

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nginx/1.14.0 (Ubuntu) and 15-year-old daughter into a waiting car, drove them to a deserted highway pull-off, and shot them in the head. The murderers then fled across the "green line" that has divided Cyprus since 1974. For a moment, it seemed that justice might take its course. Turkish-Cypriot police, in the north of the island, arrested the occupants of an unregistered car matching the description of a vehicle at the crime scene. But when prosecutors asked for other evidence to be handed over, Greek-Cypriot authorities in the south refused, demanding that the trial be held on their turf. United Nations mediators tried but failed to break the deadlock, and the suspects were soon released from custody and remain at large in northern Cyprus and Turkey. "It's a sad story," the Greek Cypriot Attorney General Petros Clerides told Time.

Sad — and typical. For 32 years, ever since an Athens-backed coup d'état triggered renewed fighting between Greek and Turkish Cypriots and provided the Turkish army with a pretext to invade, the island has been divided. In the south, 80% of Greek ethnic origin, is the Republic of Cyprus; the north of the island is under the control of the Turkish Republic of Northern Cyprus, recognized only by Turkey. There is no direct cooperation between the two sets of authorities, who for all practical purposes refuse to recognize the jurisdiction of each other.

Efforts to reunify Cyprus have consistently failed, most recently when U.N. Secretary-General Kofi Annan proposed a comprehensive plan that would have compensated Greek Cypriots for land lost to Turks and ensured the security of Turkish Cypriots, reunifying the island under a single government. In separate referendums, 76% of Greek Cypriots rejected the plan; Turkish Cypriots voted overwhelmingly in favor. Cyprus was admitted to the European Union in 2004 as a divided island — a complicated arrangement that means while the E.U. considers all Cypriots its citizens, it only recognizes the government in the south, so its laws do not apply in the north. Efforts since then by the E.U. to ease trade and travel restrictions on the north have borne little fruit.

Now the standoff between the two sides of a U.N. buffer zone is threatening to derail crucial talks on Turkish accession to the Union. A report this week by the European Commission is expected to be sharply negative about Turkey's membership prospects, partly because Turkey has not agreed to open its ports to Greek Cypriot ships. If Turkey does not budge by December, E.U. officials warn, membership talks may be suspended. Last week, plans to hold a summit on the issue had to be abandoned because of an unwillingness to compromise by all sides. The E.U.'s Commissioner for Enlargement, Olli Rehn, has called the prospect of breaking off membership talks with Turkey a "train wreck" whose consequences are "so negative I don't care to think of them."

He'd better start thinking, because opinions are hardening on the island. Since entering the E.U., attitudes among Greek Cypriot politicians to Turkish Cypriots' claims to govern the north seem to have sharpened. Meanwhile, Turkish Cypriot demands for international recognition have grown. In particular, the easing of restrictions on air travel — so that flights from countries other than just Turkey could land at their airport — would be a boon to local tourism. Turkish Cypriots would like their courts and universities to be recognized by other countries too. In his "presidential" mansion, a cluster of old colonial-era sandstone buildings, the Turkish Cypriot President Mehmet Ali Talat complains: "We are facing very unfair treatment. Lifting the international isolation on Turkish Cypriots should not be a question of bargaining."

But bitter memories and generations of distrust have made compromise difficult. The Turkish military, diplomats believe, has more than 30,000 troops on the island; the bulk of them would probably have to leave in the event of a settlement, and their leaders would prefer that they did not. For their part, Greek Cypriot business leaders and resort owners fear competition from the Turkish side of the island if the north gains official recognition. Ordinary Cypriots blame their entrenched political élites for a failure of imagination. Neshe Yashin, a Turkish-Cypriot poet and peace activist who lives on the Greek side of the island, says that the political class "are all nationalists. And not only that, they are fighters. They killed each other. This is the class that benefits from the conflict." Says a U.N. official: "There's no public debate about how to find a solution. There is no civil society. The politicians monopolize the debate and exploit it for their own ends. They are incredibly well-organized and ruthless, and the business community has to toe the line."

Three years ago, before the referendums, there was room for optimism. The green line was opened to traffic, but in the political vacuum that has existed since 2004, the main beneficiaries of free movement seem to be criminals. "The bicommunal activity to have benefited most from the 2003 opening of the green line," says one U.N. official, "is crime." Dozens of suspects wanted on charges of fraud, rape, attempted murder and other serious crimes are escaping justice simply by crossing the green line to the other side of the island. Nightclubs on both sides of the line have become a destination for traffickers bringing women from Eastern Europe, according to a recent U.S. State Department report. In a rare sign of unity, Greek and Turkish Cypriot people smugglers are working "hand in hand" to bring in asylum seekers from Iran, Iraq and Afghanistan, according to a senior Turkish Cypriot official. The number of illegal immigrants caught crossing into the south increased to nearly 5,000 last year, according to Greek Cypriot authorities.

Attempts to stimulate trade between the two sides of the island, however, have largely failed. Exports from the north to the south — primarily farm products such as tomatoes — fell short of €1 million last year. The lack of cooperation extends to matters of public health, too. When authorities in northern Cyprus announced last year that they had identified a case of avian flu, Greek Cypriot authorities refused to acknowledge the warning and accused Turkish Cypriot authorities of trying to spread alarm and discourage tourism.

Meanwhile, officials continue to bicker over cases like the Guzelyurtlu murder. "We won't recognize the [Turkish Cypriot] courts because that would mean recognizing the government," says Attorney General Clerides. For his part, a senior Turkish Cypriot official told Time that the northern authorities have no intention of handing the suspects over. It's a tale that could be repeated throughout the island. "We are having a hard time seeing the future," says Yashin, the peace activist. "We are lost in the present."

• ANDREW PURVIS | NICOSIA
• The chances of a resolution to the long dispute over Cyprus look as slim as ever