(Updates with comments from Greek Cypriots and Greece from pars four to seven)
By Simon Bahceli
FAMAGUSTA, Cyprus, April 26 (Reuters) - Turkey on Thursday began drilling for oil and gas in breakaway northern Cyprus, straining tensions with Greek Cypriots in a move that could hinder UN-backed efforts to reunite the divided island, key to Ankara's aspirations to join the European Union.
At a ceremony in northeast Cyprus, the state-run Turkish Petroleum Corporation (TPAO) launched onshore drilling at the 3,000-metre-deep Turkyurdu-1 well in search of hydrocarbons near the town of Trikomo, or Iskele in Turkish.
"I believe this project can be a force for peace in Cyprus," Turkish Energy Minister Taner Yildiz said at the ceremony. "While energy has produced wars in other parts of the world, here it will be a force for peace."
Greek Cypriots and their close ally Greece criticised the move, accusing their old rivals of undermining the peace process.
"Actions such as this drilling undertaken by Turkey and the Turkish Cypriot leadership display a lack of will on their part in solving the Cyprus problem," said Cypriot government spokesman Stefanos Stefanou.
A spokesman for the Greek foreign ministry in Athens said the action was illegal and in contravention of UN resolutions on the island calling on member states to respect the sovereignty, independence and territorial integrity of Cyprus.
"This action once again highlights that the Cyprus issue is primarily an issue of invasion and occupation," the Greek spokesman said.
Turkey was outraged last year when the internationally recognised government of Cyprus licensed Texas-based Noble Energy to explore an offshore block for natural gas in what it said is one of the biggest finds in years.
Prime Minister Tayyip Erdogan called the drilling "madness" and said it would torpedo peace talks aimed at reuniting the island. Turkey then dispatched naval ships to accompany its own seismic research vessel to explore in waters 10 kilometres from the Cyprus drill site.
Cyprus has been divided since 1974, when the Turkish military invaded the island after a short-lived Greek Cypriot coup engineered by the military junta then in power in Athens.
Turkey still keeps about 30,000 troops in the north and is the only nation which recognises the self-declared Turkish Republic of Northern Cyprus.
Cypriot President Dimitris Christofias and Turkish Cypriot leader Dervis Eroglu have made little progress in negotiations since the UN persuaded them to renew talks late last year.
The dispute has impeded Turkey's efforts to join the EU.
Frustrated by the lack of progress, Turkey has said if there was no solution by July 1 when Cyprus takes over the European Union presidency, it would suspend dialogue until the presidency passes to another EU member in 2013.
Last month, Turkish Minister for EU Affairs Egemen Bagis revived a threat to annex northern Cyprus if the current round of peace talks failed, a possibility Turkey has previously floated.
Many of the island's 250,000 or so Turkish Cypriots oppose annexation, even though their economy is heavily dependent on trade with Turkey and outright aid due to an international embargo in place since 1974.
The island has defied decades of UN-brokered efforts at reunification. In 2004, Greek Cypriots voted no in a referendum to reunite the island, while the smaller Turkish Cypriot population voted yes. (Additional reporting by Michele Kambas in Nicosia; Writing by Ayla Jean Yackley; editing by Keiron Henderson)