In accordance with Public Law 95 - 384, I am submitting herewith a bimonthly report on progress toward a negotiated settlement of the Cyprus question.

Since my previous report to you, United Nations Secretary General Perez de Cuellar met August 6 and 7 in Vienna with representatives of the two Cypriot communities to launch a new initiative in the search for a settlement to the Cyprus question. Those meetings resulted in the sides agreeing to enter into proximity talks in New York under the Secretary General's auspices. President Kyprianou and Mr. Denktash were in New York from September 10 through 20 for those meetings.

Upon the completion of that first round of proximity talks the parties agreed to return to New York for a second round beginning in mid-October. We understand the talks produced a clearer understanding of the respective positions of the parties and that in the second round the Secretary General will attempt to secure agreement to an outline of general points for eventual direct discussion between the parties.

High-ranking Administration officials have kept in close contact with both Cypriot sides, with United Nations officials, and with other interested parties throughout this period. Ambassador Jeane Kirkpatrick met with United Nations Secretary General Perez de Cuellar on September 19, and Secretary Shultz saw President Kyprianou, as well as the Foreign Ministers of Greece and Turkey, on September 27. In addition, Special Cyprus Coordinator Richard Haass met September 25 with Mr. Rauf Denktash, leader of the Turkish Cypriot community, following the end of the first round of proximity talks in New York.

At these bilateral meetings we urged the Cypriot parties to use this important series of proximity talks to establish the basis for a fair and final settlement, and we reiterated our support for the Secretary General in his good offices role. I made this clear to the Secretary General when I met him on September 23 as well as in my address to the United Nations General Assembly on September 24 when I stated: ``the United States supports the Secretary General's efforts to assist the Cypriot parties in achieving a peaceful and reunited Cyprus.''

We have been pleased to see that both Cypriot parties have taken a serious approach to the Secretary General's initiative and have foregone actions that might damage the process. We will continue to strive for an environment conducive to serious discussions between the Cypriot parties and the Secretary General, away from the glare of publicity. We remain convinced that quiet diplomacy and a mutual spirit of compromise represent the best means of eventually achieving a reunited Cyprus in which all Cypriots can live in peace and security.

Sincerely,

Ronald Reagan

Note: This is the text of identical letters addressed to Thomas P. O'Neill, Jr., Speaker of the House of Representatives, and Charles H. Percy, chairman of the Senate Foreign Relations Committee.