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Photographer: Adem Altan/AFP via Getty Images

Photographer: Adem Altan/AFP via Getty Images

The European Union will offer Turkey incentives to strike a deal with Greece and Cyprus over maritime claims while also preparing sanctions against Ankara if mediation fails, a senior official in Brussels said.

The carrot and stick approach will be followed during a summit of the blocs leaders set for Sept. 24-25, said the official, who spoke on condition of anonymity following a call between EU Council President Charles Michel and Turkish President Recep Tayyip Erdogan on Sunday over tensions in the Eastern Mediterranean.

The call came as strains between Turkey and Greece, both NATO members, over contested territorial waters have been mounting in recent weeks as the Turkish government pursues energy exploration in the region.

The recent row has raised concerns about a potential military confrontation between the two countries, which have key positions on the alliances southeastern flank.

Greece says islands must be taken into account in delineating a countrys continental shelf, in line with the UN Law of the Sea, which Turkey hasnt signed. Ankara argues that a countrys continental shelf should be measured from its mainland. It says that the disputed area south of the Greek island of Kastellorizo -- a few kilometers off Turkeys southern coast -- therefore falls within its exclusive zone.

Competing claims over the Eastern Mediterranean

Sources: Turkeys Ministry of Foreign Affairs; Anadolu Agency; Greek government; Flanders Marine Institute

The 27-nation EU is engaged in a balancing act over Turkey, seeking to defend the sovereignty of member countries Greece and Cyprus while holding out hope that diplomatic initiatives can ease tensions with a strategically important partner. Turkey plays a key role in limiting the risk of another influx of Middle Eastern refugees into the EU.

Heres What Is at Stake as Turkey-Greece Tensions Rise Again

Michel has called a meeting of EU leaders for this month to discuss the situation in the region and the blocs relations with Turkey more broadly. During his call with Erdogan, Michel reiterated that the EU stands in solidarity with Greece and Cyprus but also wants a constructive relationship with Turkey, the official said.

Greek Prime Minister Kyriakos Mitsotakis, meanwhile, said that in order for talks between the two sides to start, Turkey must first stop its threats.

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EU to Consider All Measures on Turkey in Maritime Dispute - Bloomberg