WASHINGTON: The United States has begun discussions about compensating Turkey for economic losses and other costs likely to be incurred in a US-led war against Iraq, according to American and Turkish officials.

Both sides described the discussions as still at an early stage and marked by a wide gap in what the Turks would like to receive and what the United States is willing to pay. But the mere existence of the talks, which participants said were initiated by the United States within the past two months, reflects the importance that US officials place on Turkey in any war with Iraq.

A longtime NATO ally bordering northern Iraq, Turkey is in position to serve as a crucial base for US military operations. Its bases and airfields would likely be prime staging areas for American forces, and Turkish troops could play a significant role policing the flow of refugees from Iraq or guarding prisoners of war. At the same time, US officials have expressed concern that Turkish forces may attempt to take advantage of a war and occupy northern Iraq to block the creation of an autonomous Kurdish region, which could serve as a base of operations for Turkey’s own separatist Kurds.

Preparing for possible military conflict with Iraq, the Bush administration has launched a number of diplomatic and military moves to secure basing, overflight rights and other crucial assistance from countries in the Persian Gulf region and elsewhere. But US officials described the offer of economic assistance to Turkey as unusual, saying similar discussions have been initiated with only one other ally in the region — Jordan.

“We’ve told them that if there is military action against Iraq, we would recognize that Turkey would have some losses and we would have to move in some fashion to help them,” a senior administration official said.

As another sign of the high-level attention that Turkey is receiving within the administration, President Bush got involved on Monday in furthering Turkey’s bid to join the European Union. He phoned the EU president, Danish Prime Minister Anders Fogh Rasmussen, and stressed the importance of “advancing Turkey’s evolution toward” membership when EU leaders convene in Denmark next month, according to a White House spokesman. Bush also plans to meet with Turkish President Ahmet Sezer on Wednesday while the two leaders are in Prague for a NATO summit.

Turkey already allows US and British warplanes to use an air base at Incirlik to patrol a “no-fly” zone over northern Iraq established after the 1991 Persian Gulf War. US authorities express little doubt that Turkey would support the United States in another war with Iraq.

But Turkish officials fear the potential economic and political consequences. Turkey lost billions of dollars in tourist revenue and trade with Iraq as a result of the 1991 war and confronted a surge in Kurdish refugees. With their economy now in recession, many Turks see another war as undercutting the prospects of recovery and further straining their country’s massive debt burden, which is being helped by $16 billion from the International Monetary Fund. They also express concern that a war could reignite unrest in Turkey’s mainly Kurdish southeast, where the military has spent much of the last two decades fighting Kurdish separatists.

It was public outrage over the state of the economy that helped fuel a victory in Turkey’s national election earlier this month by the Justice and Development Party, whose leaders hold strong Islamic beliefs. So far, however, US officials say they have been encouraged by some of the new leading party’s initial moves. “We’re favourably impressed with the quality of people being mentioned for the top economic posts and other ministerial jobs,” another senior administration official said.

US and Turkish officials familiar with the discussions over a war compensation package said several options have been mentioned, including outright grants, preferential trade terms for Turkish exports to the Washington, US military equipment transfers and contracts for Turkish firms to help in the reconstruction of a post-war Iraq.

“We’ve heard a wish list from the Turkish side,” a senior official said. “There’s a whole host of ways it could be structured.”

Turkish authorities said they also hope for a significant boost in US aid even if no war comes. They say just the talk of war has shaken Turkey’s economy, discouraging tourism and trade, raising oil prices and limiting access to international financial markets.

Turkey already has begun to see an increase in some US assistance. Congress recently appropriated $200 million in grants to support Turkish economic reforms and approved another $28 million to help cover Turkey’s expenses as head of the international peacekeeping force in Afghanistan. The House also has passed trade legislation that would give Turkish goods duty- free access to the US market. But the measure has yet to be taken up in the Senate.

While congressional sources report bipartisan sentiment in favour of expanding economic benefits to Turkey, they said an administration move to provide new weapons could run into resistance. US military sales to Turkey have been stymied since the late 1990s by human rights concerns over treatment of Turkish Kurds.—Dawn/The Washington Post News Service.