Obama said that Turkey’s strained ties with Israel and increasing support of Iran could hinder an arms deal between Ankara and Washington.
The ultimatum is particularly important to Turkey, who was reportedly planning to buy American drone aircraft to attack Kurdish group PKK after the US pulls out of Iraq next year.
“The president has said to [Recep Tayyip] Erdogan that some of the actions that Turkey has taken have caused questions to be raised on the Hill [Congress] about whether we can have confidence in Turkey as an ally," one senior administration official told the Financial Times.
"That means that some of the requests Turkey has made of us, for example in providing some of the weaponry that it would like to fight the PKK, will be harder for us to move through Congress,” the official was quoted as saying.
Relations between Israel and Turkey have grown increasingly strained since Israel's three-week-long Operation Cast Lead in Gaza, which was launched in December 2008. More than 1,400 Palestinians were killed, including 420 children and over 5300 others were injured.
Erdogan condemned the Israeli offensive in Gaza, and criticized the Israeli blockade of the Palestinian enclave.
Following the offensive, Turkey called off a joint military drill with Israel, and relations were strained further after Israel rebuked the then Turkish envoy over a television show depicting Israeli soldiers as cold-blooded killers.
The most critical blow to Israeli-Turkish relations, however, came on May 31, when Israeli commandos raided a Turkish aid convoy trying to break the naval blockade on Gaza, which resulted in the deaths of nine Turkish activists. Turkey had threatened to cut off diplomatic ties with Israel, and continues to demand an official apology over the raid.
Turkey's Foreign Minister Ahmet Davutoglu last week said Israel should admit sole responsibility for the killing of the nine activists.
"No one else can take the blame for killing civilians in international waters," Davutoglu told journalists. "Israel has killed civilians, and should take the responsibility for having done so."
Turkey, which is a NATO member and European Union member candidate, has also seen its capital rise sharply in the Muslim Middle East since Ankara's vocal condemnation of the killings of nine pro-Palestinian activists aboard a Gaza-bound aid ship.
Ankara, together with Brazil, brokered a nuclear fuel swap in May in the hopes that the deal would draw Iran and major powers back to the negotiating table.
Turkey last week also said it would support gasoline sales by Turkish companies to Iran, despite U.S. sanctions that aim to squeeze the Islamic Republic's fuel imports.
The U.S. administration official quoted by the Financial Times, however, said that Turkey needs to show it takes American national security interests seriously.
Washington is closely watching Turkish conduct to assess if there were “sufficient efforts that we can go forward with their request,” the official said.
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