ATHENS (Reuters) -- New Greek Foreign Minister Dora Bakoyanni said on Wednesday that improving relations with arch-rival Turkey and resolving the dispute over the divided island of Cyprus would be among her top priorities.

A day after a broad cabinet reshuffle handed her Greece's second highest job, Bakoyanni, who is seen as conciliatory towards neighbouring Turkey, made clear Greece wanted to warm up ties that have been in limbo for several months.

"My priorities will be the big issues we face -- firstly Cyprus, then developing Greek-Turkish relations and the broader development of the Balkans," Bakoyanni told ministry staff.

Bakoyanni, the daughter of a former prime minister, was one of the few Greek politicians to openly back a United Nations peace plan for Cyprus -- approved by Turkish Cypriots but rejected by Greek Cypriots in a 2004 referendum.

But she made no comments on last month's Turkish proposal to revive Cyrpus reunification talks under U.N. auspices. The new proposal was met with a cool response from Greek Cypriot President Tassos Papadopoulos and a noncommittal response from the U.N., which said it would study Ankara's new plan.

Efforts to re-unify the ethnically divided island have largely ground to a halt, creating a major stumbling block in Turkey's ambitions to join the European Union.

The appointment of Bakoyanni, the highly popular mayor of Athens, had been mooted for weeks. She, along with nine other newly appointed ministers and deputy ministers, were sworn in earlier on Wednesday.

Prime Minister Costas Karamanlis announced the mid-term cabinet shake-up in his cabinet largely to burnish the government's image amid declining popularity in the polls.