There have been encouraging signals from both the Georgian and Abkhaz sides of their interest in settling their conflict by peaceful means only, UN Secretary-General Kofi Annan said in his latest report on Monday.

"The willingness of the Georgian and Abkhaz sides to resume, after a prolonged suspension, their participation in the negotiation process is a welcome development, and may usher in a period of renewed possibilities for progress," he wrote in an update to the Security Council on the situation in Abkhazia, Georgia.

He cautioned that the degree to which this potential can be realized will depend upon the parties' willingness to continue their engagement on practical issues and, ultimately, to address the core political questions that are central to achieving a comprehensive political settlement of the conflict.

"Sustained and coordinated external support will be crucial for progress," he stressed, noting also the momentum gained from a meeting last month in Geneva of the so-called Group of Friends -- France, Germany, Russia, Britain and the United States -- which brought both sides together for the first time since suspension of the contacts in July 2004.

Annan again urged the Abkhaz authorities to ensure free and unrestricted access by the UN Observer Mission in Georgia, which has been in place since 1994 to monitor a truce between the Georgian and Abkhaz sides.

Abkhazia, formerly a Georgian autonomous republic, unilaterally declared ndependence in July 1992, triggering a two-year armed conflict between the Akhaz separatists and the Georgian government.

The war ended in 1993 after an accord was signed in Moscow.

The United Nations currently has 117 military observers in Abkhazia monitoring the situation along the ceasefire line. Aside from the UN force, Russia also deployed peacekeeping troops in the region.