US, Turkey to resolve detainee spat 'in a matter of days': Pompeo

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The sell-off, which also hammered local stocks and Turkey's debt risk profile, reflected deepening investor concern over tensions with the United States, a North Atlantic Treaty Organisation ally and major trading partner. Mr. Erdogan's government also alleges the Mr. Brunson has ties to a Turkish preacher now living in exile in the US whom Ankara accuses of fomenting the coup.

The US imposed the sanctions on Justice Minister Abdulhamit Gul and Interior Minister Suleyman Soylu, arguing that both men played a major role in the arrest and detention of the pastor.

State Department spokeswoman Heather Nauert said U.S. Secretary of State Mike Pompeo would meet Turkish Foreign Minister Mevlut Cavusoglu to discuss the issue on the sidelines of regional meetings in Singapore on Friday.

Erdogan called the sanctions a "serious disrespect towards Turkey" and accused the USA of hypocrisy for demanding the release of evangelical pastor Andrew Craig Brunson while ally Turkey tries him over alleged links to terror groups.

The pastor, who has lived in Turkey for more than 20 years, faces as many as 35 years in jail if found guilty. He was recently moved from prison to house arrest. "They agreed to continue to try to resolve the issues between our two countries", she said. "But we have agreed to work together, closely cooperate and keep the dialogue in the coming period", he added, also describing the talks as very constructive. "These are innocent people".

He said the sanctions are meant to show Turkey that the U.S. is "serious" about the issue.

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"We've seen no evidence that Pastor Brunson has done anything wrong", Sanders said, calling his detention "unfair and unjust".

The lira hit a record low of 5.0934 to the dollar, recovering to trade at 5.0605 by 1434 GMT.

The American pastor was also charged with supporting outlawed Kurdish PKK fighters. On Tuesday, a court rejected his appeal to be released altogether during his trial.

"I am instructing my friends today, we will freeze assets, if there are any, of the United States justice and interior secretaries in Turkey", Erdogan, speaking at a ruling Justice and Development (AK) Party meeting in Ankara, was quoted as saying by the official Anadolu news agency.

Top U.S. officials, including President Donald Trump and Vice President Mike Pence, have said there is no evidence against Brunson and demanded his release.

Turkey has been trying for two years to have Gulen extradited from the United States.

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