European leaders have agreed on the first steps on sanctions against Turkey in response to Ankara's prospecting for gas in Greek and Cypriot waters.
After a marathon summit on Thursday, EU leaders agreed to target the sanctions on individuals in the first instance but further measures could be imposed "if Turkey pursues its actions".
"Turkey has engaged in unilateral actions and provocations and escalated its rhetoric against the EU, EU Member States and European leaders," a statement said after a debate at a summit in Brussels.
"Turkish unilateral and provocative activities in the Eastern Mediterranean are still taking place, including in Cyprus's exclusive economic zone."
The sanctions are in response to Turkey challenging Greek and Cypriot territory by gas drilling in the Mediterranean Sea.
French President Emmanuel Macron welcomed the EU's "firmness" on Turkey but there will be disappointment in Greece and Cyprus that the leaders did not agree to seek an arms embargo or to target entire sectors of Turkey's economy. German Chancellor Angela Merkel said she hoped the messages sent by the EU would be "received correctly".
The conclusions called for a list to be drawn up of targets for "restrictive measures". Turkey said the EU plan to draw up sanctions was both partisan and illegal.
"We reject the biased and unlawful attitude which had to be inserted into the December 10 EU summit conclusions after the pressure of solidarity and veto," the foreign ministry said after the meeting.
France, Greece, and Cyprus had pushed for tough action against Turkey, but other EU nations including Germany, Italy and Poland opposed slapping broad sanctions or an embargo on a fellow NATO member.
Turkish President Recep Tayyip Erdogan said that some "countries in the EU with common sense displayed a positive approach and foiled this game”.
Ahead of the summit, Mr Erdogan dismissed the sanctions threat: “Turkey does not care much about any sanctions decision to be made by the EU. The EU has never treated us honestly. The EU has never stood by any promise it has given us but we always remained patient and we are still patient."
The EU announcement comes a day after US plans to sanction Turkey over its S-400 air defence system, which was controversially purchased from Russia, were reported by the Washington Post. Mr Erdogan said any US sanctions would be "disrespectful".
President Donald Trump, who once called Mr Erdogan a "good friend", avoided sanctioning Turkey under a 2017 law known as CAATSA, which lays out measures against nations that buy significant quantities of arms from US adversaries, including Russia.
However, with weeks left of his presidency, Mr Trump plans to impose sanctions against Ankara "in the coming days for purchasing and testing" the S-400s.
Mr Erdogan said: "While they (US administrations) say with pride 'We have a NATO country like Turkey', for them to now stand up and confront Turkey with CAATSA, once more it's a disrespect to a very important NATO partner.
"I don't know where this will lead to before Trump leaves but during the four-year Trump period, I didn't have any problems in communicating with America.”
Ties between the US and Turkey have been strained over multiple issues, including US support for a Kurdish militia in Syria viewed as terrorists by Ankara, as well as the S-400s.
However, Mr Erdogan appeared to suggest relations could improve under president-elect Joe Biden, as he said he knew the former vice president under Trump's predecessor Barack Obama. "He is someone who knows me very well. And I know him very well," Mr Erdogan said.