France put at risk its ties with Turkey, a key NATO ally and one of Europe's fastest growing economies, on Thursday, when lawmakers passed a bill to ban the denial of the Armenian genocide.

Turkey has threatened diplomatic and trade sanctions if the bill is passed, accusing President Nicolas Sarkozy's right-wing UMP party of pandering to France's large Armenian community ahead of elections next year.

France wants to work closely with Turkey on dealing with the Iranian nuclear stand-off and the crisis in Syria, as well as tap into its large market, and the effects of a breakdown in relations could be major.

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Source: Agencies