The so-called Proliferation Security Initiative was signed here by US Secretary of State Condoleezza Rice and Cyprus Foreign Minister Georgios Iacovou.

The Mediterranean island, home to the world's sixth biggest merchant shipping fleet, is the fifth country to sign a bilateral accord with Washington, following Liberia, Panama, the Marshall Islands and Croatia.

The State Department noted that it was the first European Union state to sign such an accord with the United States.

Under its terms, the countries navies will be empowered to stop US or Cypriot-flagged vessels suspected of carrying weapons of mass destruction.

Rice and Iacovou also discussed "a number of bilateral issues, bilateral and regional issues of mutual interest, including prospects for a comprehensive Cyprus settlement," according to department spokesman Sean McCormack.

"We continue to actively support the UN secretary general's approach toward a permanent solution on Cyprus," McCormack said.

The Greek-Cypriots in April of 2004 rejected a reunification plan for the island backed by UN Secretary General Kofi Annan.

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