The UN secretary-general said that desire for a settlement on Cyprus continued to prevail among both nations on the divided island, but that trust remains low.
"People are skeptical about the prospects for successful talks," said Antonio Guterres in a report on Thursday, a day before submitting it to UN Security Council.
The report assesses the negotiation process in line with developments that took place on Nov. 11-Oct. 30.
In the report, Guterres said that despite "repeated calls" on both leaders to better inform the two communities about the "contours of a settlement" and to improve the overall conditions and atmosphere for the process, the climate "deteriorated further".
He blamed "increased tensions in and around Cyprus" and the sides' "disagreement over the terms of reference" which he said is "prolonging the stalemate".
Turkey has consistently contested the Greek Cypriot administration’s unilateral drilling in the Eastern Mediterranean, asserting that the Turkish Cypriot administration also has rights to the resources in the area.
Friday is the 36th anniversary of the foundation of the Turkish Republic of Northern Cyprus.
The president of the administration, Mustafa Akinci, said Turkish Cypriots would never accept threats to their freedom, distinctiveness, equality and security.
Akinci pointed out that the approach of punishing the Turkish Cypriot side did not help resolve the issue in the Eastern Mediterranean and that Turks had no choice but to seek their rights.
"Neither side has made sufficient effort to avoid unhelpful rhetoric which has further reinforced skepticism amongst the public," said the UN chief.
Guterres also noted that the situation on the ground had become increasingly complex, possibly linked to a prolonged hiatus in the political process and uncertainity surrounding its future.
"I continue to hold out hope that a durable settlement to the Cyprus problem can be achieved and urge all parties to take advantage of this period of consultations to lay the groundwork for fresh commitments to achieve a peaceful settlement," he added.
In 1974, following a coup aiming at Cyprus’ annexation by Greece, Ankara had to intervene as a guarantor power. In 1983, the Turkish Republic of Northern Cyprus (TRNC) was founded.
The decades since then have seen several attempts to resolve the dispute, all ending in failure. The latest one, held with the participation of the guarantor countries -- Turkey, Greece, and the U.K. -- ended in 2017 in Switzerland.
*Servet Gunerigok in Washington contributed to this story