Turkey on Friday dismissed as "unlawful" a European Union plan for sanctions over its maritime disputes with Greece and Cyprus, as President Recep Tayyip Erdogan urged calm.

After a marathon Thursday summit, EU leaders decided to draw up a list of Turkish targets for sanctions because of Ankara's "unilateral actions and provocations" in the eastern Mediterranean, believed to be rich in energy resources.

But Turkey, an EU candidate country whose accession process has frozen over many issues including its human rights record, is also at risk of such reprisals from NATO ally the United States over its controversial acquisition of Russian defence systems.

The extent of European and possible US sanctions was not immediately known, but they could weigh on the vulnerable Turkish economy.

They could also hurt the already depreciating Turkish currency, which suffered further losses on Friday before rallying. 

"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 Turkish foreign ministry said in a statement.

The list of individuals targeted by the sanctions would be known in the coming weeks.

But a lack of consensus among member states blocked broader economic sanctions and prevented Greece's attempts to impose a European arms embargo on Ankara. 

"I will not reveal the drama," a Western diplomat said of Thursday's meeting.

"You see that part of the public's expectations which were raised by some European countries are not present in the conclusions and that certain things that aired publicly, including an arms embargo, were not in the conclusions," the diplomat added.

"This is the result of discussion."

Deep-rooted ties 

French President Emmanuel Macron, who backs Greece, welcomed the EU's "firmness" on Turkey but Erdogan played down the bloc's plans.

He said some "countries in the EU with common sense displayed a positive approach and foiled this game," speaking to reporters in Istanbul.

"We have deep-rooted political and economic relations with both the US and the EU which neither of them can ever disregard or risk losing," Erdogan said in another address later on Friday. 

In an apparent attempt to calm things down, he said: "We have never taken and will never take any step that will harm the spirit of these relations."

"An agenda of sanctions imposed due to political aims and irrational basis is harmful for all sides and do not bring any benefits or profits," the Turkish leader added.

He said Turkey believed any issue could be "resolved through dialogue and cooperation."

Erdogan's comments appear to be an attempt to protect the Turkish economy, whose growth is a major pillar of support for his government, from the potential devastating impact of tougher European and American sanctions.

The Turkish lira declined further Friday to reach 8.02 against the US dollar, before rallying to 7.85 towards 1400 GMT, a loss of less than half a percent.

The lira has lost around 25 percent in value against the greenback since the start of 2020.

Disrespect

US sanctions over the S-400 air defence system, controversially purchased from Russia, would be "disrespectful", Erdogan said in comments published by Turkish media Friday after US reports that the measures were imminent.

Russia delivered the system last year to Ankara and Turkey tested the system in October -- in the face of Washington's repeated condemnations and warnings over punitive measures.

US President Donald Trump, who once called Erdogan a "good friend", avoided sanctioning Turkey under a 2017 law known as CAATSA, which lays out sanctions against nations that buy significant quantities of arms from US adversaries including Russia.

But with weeks left of his presidency, The Washington Post reported on Thursday on Trump's plans to impose sanctions against Ankara "in the coming days for purchasing and testing" the S-400s.

"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 disrespect to a very important NATO partner," Erdogan said after a visit to Azerbaijan.