ANKARA, Turkey (AP) — Faced with the prospect of sanctions from both the United States and the European Union, Turkish President Recep Tayyip Erdogan said Friday that economic penalties would be detrimental to all sides and that Turkey's disputes with its allies can be resolved through dialogue and cooperation.

Erdogan’s comments came hours after the EU gave the green light for the expansion of sanctions against Turkey over its exploration of gas reserves in eastern Mediterranean waters claimed by EU members Greece and Cyprus.

Turkey also faces US sanctions over its purchase of a Russian air defense system, which has already resulted in the NATO-member being kicked out of the U.S. F-35 stealth fighter program.

“We have deep-rooted political and economic relations with both the United States and the European Union, which neither side can ignore or certainly risk losing,” Erdogan said in a teleconference address to his ruling party’s officials. “There is no issue that cannot be solved through dialogue and cooperation.”

The EU leaders said early Friday that Turkey — which is a candidate to join although its membership talks are blocked — has “engaged in unilateral actions and provocations and escalated its rhetoric against the EU.” This was despite the fact that they had offered trade and other incentives to Turkey to halt its activities during their last summit in October, they said.

The leaders tasked EU foreign policy chief Josep Borrell with drawing up a report on the state of EU-Turkey political, economic and trade relations and with suggesting how to proceed, including on widening sanctions. Borrrell was asked to submit the report to the leaders by the time they hold a summit in March.

Turkey’s Foreign Ministry slammed the EU decision, saying Ankara rejects the 27-member group’s “biased and unlawful attitude.” It added that the decision was approved out of solidarity with Greece and Cyprus.

But Erdogan, speaking to reporters earlier on Friday, suggested that the decision was less severe than what Greece and Cyprus had hoped for.

”(The decision) did not meet the expectations of some countries, because their demand was not just,” Erdogan said. “Some reasonable countries within the EU asserted their positive stance and spoiled their game.”

EU countries are split over how best to handle Turkey. France and Cyprus have pushed for tougher measures such as economic sanctions, but other countries are concerned about further undermining the country’s already ravaged economy and destabilizing the region.

French President Emmanuel Macron, speaking in Brussels after the EU summit said Europe “remains obviously always open to dialogue but won’t accept a policy destabilizing its member states as well as its regional environment.”

He praised the EU decision and the prospect of U.S. sanctions as a response to “Turkey’s inconsistencies within NATO.”

“It shows we are right, sometimes, to be clear and vocal when attitudes are unacceptable.”

Greek Prime Minister Kyriakos Mitsotakis said the EU took a strong step warning Turkey to “change behavior.”

He said that, for Greece, sanctions were not a goal in and of themselves.

“But the threat of sanctions in case Turkey continues its provocative action is the best tool we have at our disposal," he said. "We don’t want Turkey to be a provocative and aggressive neighbor. And I don’t believe this is to the benefit of Turkey or of Greece or of Europe.”

Tensions between NATO allies Turkey and Greece escalated over the summer with a military build-up after Turkey sent its seismic survey vessel Oruc Reis, escorted by navy frigates, into disputed waters. The move prompted Greece to also send its warships, and both countries conducted military exercises to assert their claims.

Late last month, Oruc Reis returned to port, as it had done before October’s EU meeting. However, another research ship, the Barbaros Hayreddin Pasa, remains off Cyprus’ southwestern coast.

Turkey says it is standing up for its energy rights, as well as those of breakaway Turkish Cypriots, while Athens and Nicosia call Turkey’s actions an illegal incursion into areas where they have exclusive offshore exploitation rights.

Last year, the EU set up a system for imposing travel bans and asset freezes on people, companies or organizations linked to contested drilling activities. Two Turkish Petroleum Corporation officials are already on the list, and the leaders say those sanctions should be broadened.

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Sylvie Corbet in Paris and Elena Becatoros in Athens contributed.