Pompeo calls for reduction in tensions in eastern Mediterranean
"President Trump has been in conversations with President Erdogan, he's spoken to the prime minister in Greece," Pompeo said.
"We're urging everyone to stand down to reduce tensions and begin to have diplomatic discussions" about security and energy, he told reporters.
"It is not useful to increase military tensions in the region. Only negative things can flow from that."
Greece has accused Turkey of violating its sovereignty by pushing ahead with natural gas exploration activities in disputed waters southwest of Cyprus.
Both countries deployed naval warships to the area in shows of force, elevating concerns over a possible clash.
On Monday Turkey showed no sign of compromising, saying its vessel conducting seismic surveys for hydrocarbons would stay in the region until September 12.
On Tuesday Pompeo announced that the US would lift its two-decade arms embargo on Cyprus, allowing non-lethal equipment to the country in a move that angered Ankara.
He said Wednesday that the decision was "a long time coming," not directly linked to the tensions between Greece and Turkey.
"We thought it was the right thing to do," he said.
But Turkey's foreign ministry said the US move "poisons the peace and stability environment in the region" and does "not comply with the spirit of alliance" between the United States and Turkey.
Cyprus welcomes lifting of US arms embargo
The United States announced Tuesday that it would lift for one year its three-decade-old arms embargo on Cyprus to allow "non-lethal" military goods to be sold to the Mediterranean island.
The move drew an immediate rebuke from Turkey, which has been engaged in a bitter dispute with Greece and Cyprus over maritime borders and gas drilling rights.
But Cypriot government spokesman Kyriakos Koushos said the development was a "recognition" of the Mediterranean island's role.
"It indicates the importance which the US and Cyprus attribute to strengthening their bilateral relations, particularly in defence and security," he said in a statement.
At a press conference in Nicosia on Wednesday, US Ambassador Judith Garber said the move was not a response to the latest tensions, but part of a regional security relationship.
"Some will ask if we are taking this (step) in response to the most recent developments in the region. The answer is no," Garber told reporters.
"Turkey is a very valued ally of the United States. It is a NATO ally and partner. We value our relationship with Turkey. It is a complicated one. But we do not have transactional relationships in the Eastern Mediterranean region."
Both Greece and Turkey have staged naval drills in the area to assert their sovereign claims to gas resources and exclusive economic zones, and the European Union warned Ankara on Friday to pull back or face EU sanctions.
On Tuesday, the Turkish foreign ministry said the US move "poisons the peace and stability environment in the region" and does "not comply with the spirit of alliance" between the United States and Turkey.
But Garber said Washington's move was about greater security and stability in a volatile region.
The northern third of Cyprus has been controlled by Turkey since a 1974 invasion following a coup aimed at unification with Greece.
The United States imposed the arms embargo in 1987, in the hope that it could encourage the reunification of the island.
But many argued the embargo was counter-productive, simply pushing the Cypriot government to create alliances with other countries such as Russia, without making progress on reunification.
UN-backed peace talks have been mired in stalemate since negotiations collapsed in July 2017.
Secretary of State Mike Pompeo informed Republic of Cyprus President Nicos Anastasiades of the change in a phone call Tuesday.
The move could open up the possibility of sales of "non-lethal defense articles and defense services", although so far, the Cypriot government has not declared any intention to buy US military hardware.
Pompeo also "reaffirmed US support for a comprehensive settlement to reunify the island".
"It is not useful to increase military tensions in the region."