ANKARA, February 20 (IslamOnline.net & News Agencies) - Turkey dug in its heels Thursday, February 20, on U.S. demands to use its territory as a springboard for war on neighboring Iraq, insisting on a guaranteed multi-billion-dollar financial package in return for its support.

The standoff between the two NATO allies has complicated military planning in Washington, prompting warnings from U.S. officials that they might consider altering operational plans on Iraq, reported Agence France-Presse (AFP).

The U.S. has offered Turkey a six-billion-dollar grant, part of which could be used to obtain long-term commercial loans of up to 24 billion dollars, to offset damage a war might inflict on Ankara's already crisis-hit economy, said Recep Tayyip Erdogan, leader of Turkey’s ruling Justice and Development Party.

"We have found the figures insufficient and we are not looking favorably at the offer," Economy Minister Ali Babacan told the Cumhuriyet daily in an interview published Thursday.

Without giving figures, Babacan said Ankara had sent Washington a counter-proposal, but no progress towards a compromise had been reached so far.

"The U.S. says the (Iraq) operation will be short. On the other hand it says the congressional process affecting all matters, including the grants, will take between six and eight weeks," Babacan told Cumhuriyet.

"What if the operation is over before the completion of the congressional process and Congress tells us 'Sorry.' That is why a written deal is a must," he said.

Babacan also rebuffed suggestions by Washington that the proposed loans be linked to existing programs between Turkey and the International Monetary Fund (IMF).

With an agreement on financial aid still up in the air, the Turkish government is holding back from calling on parliament to debate the deployment of U.S. troops on its soil, Foreign Minister Yasar Yakis said Thursday.

"We have not come there yet," Yakis told parliament.

The government would only consider submitting to parliament a motion on the deployment of U.S. soldiers in Turkey after the differences had been ironed out, Yakis said.

"Only when the negotiations with the U.S. are concluded and put into a text, will we discuss whether such a motion is necessary or not. If it is, we will bring it to parliament," the minister said.

Ankara's anxiety over financial aid stems from the 1991 Gulf War, in the wake of which it suffered substantial economic damage despite having backed the U.S.-led coalition against Baghdad.

Turkey says it lost up to 40 billion dollars in trade because of U.N. embargoes slapped on Iraq, and it has accused Washington of failing to deliver on promised compensation.

This time, Turkey is insisting not only on getting its money's worth, but on firm guarantees that the United States' congress will appropriate the necessary funds.

Powell Expects to Hear From Turkey Today

Secretary of State Colin Powell said he expected to hear from Turkey later Thursday in the diplomatic tussle over whether it will allow U.S. troops on its soil ahead of any war with Iraq.

"I expect to hear back from them before the day is out," Powell told reporters.

A senior State Department official said that Powell did not necessarily mean to imply that he expected a final answer from the Turks on Thursday.

Powell signaled after meeting NATO Secretary General George Robertson that the United States was not set to up its offer of aid, but did not rule out other ways of modifying the package.

"I reaffirmed to them yesterday morning in a phone call to the prime minister that our position was firm with respect to the kind of assistance we could provide -- with respect to the level.

"There may be some other creative things we can do," he said.

Turkey Plays Delay Strategy

Many analysts say the U.S.-Turkish talks are part of a delaying strategy by a Turkish government that feels trapped between the desires of its strongest ally and the wishes of the Turkish public, which is overwhelmingly against war, reported the Washington Post.

Analysts have also said that in the end, Turkey is almost certain to agree to at least some U.S. demands to preserve its friendship with the United States, whose support for Turkey in the European Union and the International Monetary Fund have been critical for Ankara.

But Erdogan appeared to bring that into question.

"There are many countries which do not support the United States but which are friends" of the United States, Erdogan said. "Will [Washington] also cut relations with France, China, Russia as well?"

That raised the prospect that Turkey might be trying to push the United States to abandon plans to use Turkish bases, a move many analysts say could lead to a serious rift between Washington and Ankara.

Without access to more bases in Turkey, the U.S. military would have to abandon a central feature of its strategy for war against Iraq.

U.S. leaders say there still would be plenty of U.S. firepower in the region to defeat Iraq's military. But abandoning the Turkish option could have huge consequences.

U.S. generals were hoping to send 80,000 troops to Turkey who would storm into Iraq, dividing the Iraq army between the north and the south. That, U.S. and Turkish generals agree, would likely shorten any war.

The dispute does not alter a decision by NATO on Wednesday, February 19, to deploy AWACS radar aircraft, Patriot missiles and chemical-biological response units to protect Turkey.