ISTANBUL - Turkish President Recep Tayyip Erdogan pledged to continue a military operation into Syria ahead of a visit Thursday by a high-level U.S. delegation led by Vice President Mike Pence and Secretary of State Mike Pompeo who are intent on pushing Turkey to agree to a cease-fire.
Thursday's talks in Ankara were reportedly arranged during a phone call between Erdogan and U.S. President Donald Trump.
Trump is calling for an immediate cease-fire and offering mediation to bring an end to Turkey's military operation, which began last week.
Ankara launched operation "Peace Spring" against the YPG Syrian Kurdish militia, which Ankara considers terrorists linked to a decades-long insurgency inside Turkey. But the militia was a crucial ally in Washington's war against the Islamic State.
No talking to 'terror organization'
However, Erdogan is dismissing Washington's efforts to end the operation.
"There are some leaders who are trying to mediate," Erdogan said in an address to parliament. "There has never been any such thing in the history of the Turkish Republic as the state sitting at the same table with a terror organization," he added.
Speaking to reporters after his parliamentary address, Erdogan ruled out meeting Pence, "I am standing tall. I will not meet them," he said. "I will speak when Trump comes."
Erdogan did quickly reverse his stance.
"He does plan to meet the US delegation led by @VP tomorrow [Thursday]" tweeted Erdogan's head of communications, Fahrettin Altun.
However, Thursday's meeting is being predicted to be difficult.
"I don't see what we can expect tangibly from the visit, just more of the same unfortunately," said former senior Turkish diplomat Aydin Selcen, who served in Washington.
"Mr. Erdogan appears not to expect much from this visit," he added. "But Moscow and Washington are lined up against this military operation, and extreme U.S. sanctions are on the way."
Trump sanctions implemented Monday over the Turkish operation were brushed aside by Erdogan and the financial markets as symbolic. But the United States Congress is threatening to introduce far more severe measures if Turkey continues with its Syrian operation.
Further financial pressure piled on Ankara, with the Southern District of New York [SDNY] court opening a case against the Turkish State lender Halkbank for violating Iranian sanctions.
"This is one of the most serious Iran sanctions violations we have seen, and no business should profit from evading our laws or risking our national security," said John C. Demers, the assistant attorney general for national security.
Last year a New York court jailed Hakan Atilla, a senior Halkbank executive on similar offenses. Atilla earlier this year returned to Turkey after completing his sentence.
The latest case potentially opens Halkbank to massive fines. Erdogan has been lobbying Trump for the investigation to be dropped. Analysts say Ankara views the timing of the case as political.
"The American side try every measure to put pressure on Turkey over its Syrian operation. Ankara definitely sees Halkbank is part of this," said international relations professor Huseyin Bagci of Ankara's Middle East Technical University. "The Turkish government is disappointed no doubt about that. The Americans think it will make things easier for them, but it will make it more complicated."
Such fears are not shared by international financial markets, with little impact on Turkish markets.
"I don't think the market is assuming that SDNY moved in connection with the Syrian situation," said an analyst for an international bank, speaking anonymously.
But the analyst warns trouble could be on the horizon if Halkbank is convicted.
"There's still concern about a Halkbank fine because a fine in the neighborhood of billions of dollars would be a big burden on Turkey's balance of payments," the analyst said.
The Halkbank case threatens to escalate U.S.-Turkish tensions, fueled by a growing mutual lack of trust.
With anti-Americanism in Turkey at a record high according to opinion polls, analysts claim a tough stance against Washington will play well among Erdogan's supporters.
Turkish media, mainly under government control, echoes Erdogan's fiery rhetoric aimed at the United States over its support of the Kurdish militia.
However, Turkey is facing growing international isolation over its Syrian operation, with Moscow adding its voice to growing calls for its end. Coupled with the threat of significant U.S. sanctions, Erdogan could yet prove flexible in Thursday's talks with Pence.
"Erdogan is looking for more time for his operation," said Bagci." But he is a pragmatist; it depends what Pence has to offer."