The vote pits a dovish incumbent striving for reunification with rival Greek Cypriots against a hardline challenger seeking to bolster a breakaway state.
Polls opened for 164,000 voters in the small northern enclave under cloudless spring skies and voting was proceeding smoothly by mid-morning, said Turkish Cypriot Press and Information Office official Mustafa Erülgen. Polls close at 6 p.m. (1500 GMT), with results expected late Sunday.
Opinion polls showed right-winger Derviş Eroğlu set to oust leftist Turkish Cypriot leader Mehmet Ali Talat as president of the breakaway Turkish Republic of Northern Cyprus. If that happens, it could end the slow-moving peace talks between Talat and the island's Greek Cypriot President Dimitris Christofias.
"I hope I will win these elections (with) over 55 percent and after the election, I'll try to be with Mr. Christofias (at) the same table," Eroğlu told the Associated Press after casting his ballot in the eastern coastal town of Famagusta.
Talat said election laws bar him from commenting on the election result.
The island's division is already hampering Turkey's EU drive and could halt it if the peace talks collapse. Since Turkey is a NATO member, such a move also could cripple closer EU-NATO cooperation and increase regional instability.
Cyprus was split in 1974 when Turkey intervened after a coup by supporters of union with Greece. Turkish Cypriots declared the independent republic in 1983, but only Turkey recognizes it, and maintains 35,000 troops there.
Cyprus joined the EU divided in 2004, with only 800,000 Greek Cypriots enjoying membership benefits.
Eroğlu's resurgence is mainly due to public disillusionment with Talat whom many Turkish Cypriots fault for not delivering on a promise of a swift deal after opening negotiations with Christofias 19 months ago.
"Derviş Eroğlu will win because he is the one who will support our rights as Turkish Cypriots. The talks will continue and we will fight for our rights," said retired policeman Mehmet Salih on Sunday.
Although Eroğlu insists he would continue peace talks, he's at odds with an agreement between Talat and Christofias envisioning a future partnership under a federal roof.
The 72-year-old veteran insists on separate sovereignty for the breakaway north, something that Christofias warned he wouldn't accept.
"I voted for Mehmet Ali Talat because I believe in peace and unity in Cyprus," said first-time voter Barış Ünel. "The vision of Mr. Eroğlu, you can see he doesn't want peace, he doesn't have a vision for a solution," said the 18-year-old student, whose first name means 'peace' in Turkish.
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