A Turkish official told Reuters the commander of Turkey's powerful navy, Admiral Metin Atac, had cancelled a visit to Washington in retaliation over the U.S. bill.

Anti-U.S. sentiment has steadily risen in Turkey, partly because of what Turks regard as an unfair portrayal of Turks during World War One, but also because of what they say is a failure by the U.S. and Iraq to crack down on some 3,000 Kurdish rebels based in northern Iraq.

Last month Turkey signed an anti-terror agreement with Iraq in an attempt to halt these Kurdish guerrilla attacks. Turkish military officials said Kurdish rebels killed 13 soldiers in fighting on Sunday in Sirnak province, which borders Iraq.

Such attacks have put domestic pressure on Prime Minister Tayyip Erdogan which has increased following the Armenian resolution. The army has been pressing for months to be allowed to mount a major cross-border operation against the rebels.

"Unfortunately there is a linkage between the bill and a Turkish incursion into northern Iraq because the Turkish public will be much angered towards the United States and the government will feel so as well," Faruk Logoglu, an influential former Turkish ambassador to Washington, told Reuters.

The United States relies heavily on Turkish bases to supply its war effort in Iraq. Any Turkish offensive into northern Iraq would seriously strain ties with Washington and possibly hurt Turkey's bid for European Union membership.

Ankara will lobby Congress to prevent the bill from being approved and Erdogan is due to travel to Washington in early November for talks with U.S. President George W. Bush.

Erdogan's government will seek authorization for a military incursion after a public holiday which ends on Sunday, senior ruling AK Party lawmaker Sadullah Ergin said.

The Kurdistan Workers Party (PKK) wants to carve out an ethnic homeland in the southeast of Turkey. More than 30,000 have been killed in the conflict.