Turkey Rejects Latest U.S. Offer to Sell Patriot Missiles

(Bloomberg) -- Turkey has rejected a U.S. proposal to deliver one Patriot missile defense system by the end of 2019, which was conditional on Ankara abandoning a deal with Russia that's strained ties between the NATO allies, two senior Turkish officials said on Friday.

The U.S. administration made its offer before Feb. 15, and then increased the price of the multi-billion dollar system in return for quick delivery, according to the officials who are familiar with the talks but not authorized to speak to the media. The proposal didn't include a loan agreement nor a technology sharing pact, a key Turkish demand, they said.

Turkey said in its response that it can't accept the U.S. offer and negotiations came to a standstill, the officials said.

Having balked for years at selling Turkey the Patriot system, the U.S. State Department notified Congress in December that it had proposed doing just that, a gambit designed to get Ankara to halt an agreement with Russia for a S-400-based system, which could compromise NATO technology.

A U.S. official familiar with the negotiations said Turkey appeared to be looking for reasons to walk away from the U.S. deal. The U.S. has offered Turkey better terms on both pricing and co-production than Russia, in an effort to persuade it not to go through with the S-400 purchase, the official said.

Turkey expects the first S-400 delivery in July. Russia has promised Turkey joint production and technology transfer as part of the agreement. Turkey's determination to buy Russian missiles has fueled demands in the U.S. that planned supplies of F-35 jets be put on hold even though portions of the Lockheed Martin Co. fighter are being built in Turkey.

The U.S. has threatened to impose sanctions on Turkey if it receives missiles from Russia.

Turkish-U.S. ties remain rocky after a series of disputes including Washington's support for a Syrian Kurdish force that Ankara regards as a mortal enemy; Turkey's demand that the U.S. extradite a preacher it accuses of instigating the failed coup attempt in 2016; and the conviction in the U.S. of a Turkish banker on Iran sanctions violations charges.

To contact the reporters on this story: Selcan Hacaoglu in Ankara at shacaoglu@bloomberg.net;Firat Kozok in Ankara at fkozok@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, ;Rosalind Mathieson at rmathieson3@bloomberg.net, Mark Williams, Stuart Biggs