Turkey has recalled its ambassador to the United States for consultations after a vote in a US congressional committee branded the killings of Armenians by Ottoman Turks genocide.
The committee's decision is expected to weaken US influence over Turkey at a time when the government is considering a military incursion into mainly Kurdish northern Iraq to fight Kurdish rebels.
Turkey's prime minister will ask parliament next week to authorise a military push although analysts say a large cross-border operation remains unlikely.
Washington fears such an offensive could destabilise Iraq's most peaceful area and potentially the wider region.
The US House of Representatives Foreign Affairs Committee approved yesterday a resolution branding the killings during World War One as genocide.
The issue of the Armenian massacres is deeply sensitive in Turkey, where it is a crime to portray them as "genocide".
The non-binding resolution now goes to the floor of the US House of Representatives, where Democratic leaders say there will be a vote by mid-November.
Turkey, which has the second largest army in NATO, has said bilateral ties and military cooperation could be damaged if Congress passes the measure.
"We called back our ambassador to Washington for consultations. It should not be understood that we have pulled him back permanently," a senior Turkish diplomat said.
In Washington, a State Department official said it was not unusual for an ambassador to be called home for consultations. The official, who spoke on condition he was not named due to the sensitivity of the issue, called it "a fairly limited response".
US State Department spokesman Tom Casey said he did not believe this development would affect Washington's efforts to work closely with Ankara on a broad range of issues.
Ankara rejects the Armenian position, backed by many Western historians and some foreign parliaments, that up to 1.5 million Armenians suffered genocide at the hands of Ottoman Turks. Turkey says many Muslim Turks died alongside Christian Armenians in inter-ethnic conflict as the Ottoman Empire collapsed.
Armenian President Robert Kocharyan welcomed the decision by the US committee. Turkey has no diplomatic ties with Armenia.
"The fact that Turkey has adopted a position up to now on genocide does not mean that it can bind other states to deny the historic truth as well," Mr Kocharyan told reporters in Brussels.