Turkey will not be intimidated by threats from Germany, President Recep Tayyip Erdogan said on Friday, as he stepped into an escalating row that risks a full-blown crisis in a key bilateral relationship.
Relations between the Nato partners -- already brittle -- have been further damaged recently by a dispute over the crackdown by the Turkish authorities that followed a failed coup last July.
Several German nationals are among those being held and Berlin has warned its citizens that their safety cannot be guaranteed in Turkey and that consular access is not assured in case of their arrest.
In an unusually hard-hitting statement that swept aside any diplomatic niceties, German Foreign Minister Sigmar Gabriel on Thursday also warned German firms against investment in Turkey and spoke of an "overhaul" of the entire relationship.
But in his first reaction to the latest twist in the crisis, Erdogan spat back that Germany does "not have the power to smear Turkey".
"They (Germany) cannot scare us with these threats, they should know this," Erdogan said in a speech in Istanbul.
'Like the GDR'
The latest crisis was precipitated by the order of a Turkish court to remand in custody six human rights activists detained on an island off Istanbul, including Amnesty International's Turkey director Idil Eser and Berlin-based activist Peter Steudtner.
But Berlin was already furious over the jailing in February of Deniz Yucel, Turkey correspondent for Die Welt
newspaper, who Erdogan has personally denounced as a "terror agent".
Germany's Finance Minister Wolfgang Schaeuble even compared Erdogan's Turkey with the former communist German Democratic Republic (GDR), accusing it of "arresting people arbitrarily".
"When you travelled there (the GDR), you knew, if something happens to you, nobody can help you," said Schaeuble.
But Erdogan declared that Turkish courts were in fact "more independent" than German ones.
"Germany should sort itself out," he added, saying Germany had to account for the wanted Kurdish militants and coup suspects who Erdogan said were hiding in Germany.
German newspaper Die Zeit
reported that Turkey had handed Germany a list of 68 companies and individuals suspected of links to terror due to alleged contacts with the group of the US-based preacher Fethullah Gulen, who is blamed for the July 15 failed coup. Gulen denies the charges.
said the groups probed ranged from carmaker Daimler to chemicals giant BASF to a stall selling doner kebab in the west of Germany.
But Erdogan denied the claims, saying the reports were "black propaganda" aimed at pressurising German companies not to invest in Turkey.
"You have no power to darken Turkey," Erdogan said.
Turkish officials have sneered that the row is to be seen in the context of the upcoming federal elections in Germany, where Gabriel will play a key role.
Gabriel is a senior figure in the Social Democratic Party, which will be squaring up against their adversaries -- albeit current coalition partners -- the Christian Democrats of Chancellor Angela Merkel.
Yet there has so far been no sign of any friction between Merkel and her top diplomat over Germany's position in the standoff.
Raising the stakes higher, Germany said on Friday it was reviewing all arms sales to Turkey as part of the overhaul in relations announced by Gabriel.
That overhaul "covers all sectors, including defence exports policy," the economy ministry told AFP.
Merkel's right-hand man, Peter Altmaier, warned in a ZDF television interview that "we will at any time consider whether further measures are necessary".
Germany is home to three million ethnic Turks, around half of whom are eligible to vote in Turkish elections.
Tensions between Ankara and Berlin spiked in the run up to a referendum in April on expanding Erdogan's powers, with the German authorities blocking requests by the Turkish ruling party to hold rallies.
Erdogan accused Merkel's government of behaving like the Nazis in comments that sparked fury across the political spectrum in Germany.