EU foreign ministers have agreed to slow down talks on Turkey's membership because of its failure to open its ports and airports to Cypriot traffic.
The decision means that talks in eight policy areas will be suspended, while talks in other areas will continue.
However, none of the chapters will be signed off until Turkey complies.
Member states went into the talks divided on how harshly to penalise Turkey, with some keener than others to avoid a possible breakdown.
The BBC's Jonny Dymond in Brussels says that many Turks already believe that the EU is stringing them along, and that the mood is likely to become even more sour in the light of this decision.
"There is every prospect that things will work steadily and effectively to make Turkey, in the fullness of time, a member of the European Union"
Our correspondent says the deal agreed by the foreign ministers includes no ultimatums, or deadlines by which Turkey must have opened its ports and airports to Cypriot traffic.
"There has been no train crash - the train is still firmly on track. Eight chapters have been suspended - 27 out of 35 are not frozen, and there is every prospect that things will work steadily and effectively to make Turkey, in the fullness of time, a member of the European Union," said UK Foreign Secretary Margaret Beckett.
Vicious circle
The ministers also reiterated a promise to end the economic isolation of the Turkish Cypriot community - but left the details to be worked out next year.
Talks on Turkey's bid to join the EU began last year, after Ankara promised to allow Cypriot ships and aircraft to use its ports and airports.
Q&A: Turkey-EU talks
But the Turkish authorities have not fulfilled their commitment, and have said they will not budge until the EU takes the steps it has promised to end the isolation of the Turkish Cypriot community.
Finland, the current holder of the EU's rotating presidency, tried unsuccessfully to break the vicious circle by launching direct trade between the Turkish Cypriots and the EU.
Up to now the Republic of Cyprus has blocked any such move.
The UK, one of the strongest supporters of Turkey's EU membership bid, had been arguing for a suspension of talks in only three policy areas.
Mrs Beckett said suspending talks in eight policy areas was "somewhat over the top".
Countries less enthusiastic about Turkish membership had pressed for a suspension of talks in 17 policy areas.
"This decision strikes the right balance... On the one hand, it sends to Turkey the signal that failure to meet legal obligations cannot remain without consequences," said EU Enlargement Commissioner Olli Rehn.
The foreign ministers' decision will be endorsed formally at a summit of EU leaders on Thursday and Friday.
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