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(Adds EU reaction)
ISTANBUL/ATHENS July 8 (Reuters) - A Turkish ship planning to drill for oil and gas close to Cyprus dropped anchor off the island on Monday, triggering a strong protest from Nicosia and a rebuke from the European Union.
Last month, EU leaders warned Turkey to end its gas drilling in waters around the island or face action from the bloc, after Greece and Cyprus pressed other EU states to speak out.
EU member Cyprus has discovered natural gas in areas off the south of the island, though nothing has been extracted. Turkey disputes the rights of the island to explore for gas, sending drill ships of its own to stake a claim around the island.
In a move that could further strain ties with Cyprus over exploration rights, Turkish Energy Minister Fatih Donmez was quoted by the Anadolu news agency on Saturday as saying the Yavuz drillship would start drilling within a week.
Refinitiv Eikon shipping data showed the Yavuz arrived off the east coast of Cyprus overnight. Another Turkish vessel, the Fatih, has been on the west of Cyprus since early May.
"Turkey's declared intention to illegally conduct a new drilling operation northeast of Cyprus is of grave concern," the EU foreign policy branch said in a statement.
It was, it said, "a further unacceptable escalation which violates the sovereignty of Cyprus."
A strongly-worded statement issued by the Cypriot presidency accused Turkey of a "grave violation."
"This planned second drilling ... is an escalation by Turkey of its repeated violations of Cyprus's sovereign rights based on the U.N. Law of the Sea and international law, and is a most serious violation of the sovereignty of the Republic of Cyprus," the presidency in Nicosia said.
The Yavuz dropped anchor just northeast of the Karpasia peninsula, a jutting panhandle which is in territorial waters.
The other Turkish vessel, the Fatih, is anchored some 37 nautical miles off the western coast of the island in an area Cyprus claims is its Exclusive Economic Zone (EEZ), a maritime zone in which it has rights over its natural resources.
Turkey maintains some of the areas Cyprus is exploring in are either on its own continental shelf, or, if not, in zones where Turkish Cypriots have equal rights over any finds with Greek Cypriots.
Nicosia rejects the claim, saying that assertion is not only inconsistent with international law, but that Turkey would not accept any international dispute settlement mechanism where its claims could be put to the test.
Cyprus was divided in 1974 after a Turkish invasion triggered by a brief Greek-inspired coup. Several peacemaking efforts have failed and the discovery of offshore resources has complicated the negotiations.
(Reporting by Daren Butler, Michele Kambas and Alissa de Carbonnel; Editing by Kirsten Donovan and David Evans)