By Gulsen Solaker and Ellen Francis
ANKARA/BEIRUT (Reuters) - Pro-Syrian government forces entered Syria's northwestern Afrin region on Tuesday to help a Kurdish militia there fend off a Turkish assault, raising the prospect of a wider escalation of the conflict.
Soon after the convoy of militia fighters - waving Syrian flags and brandishing weapons - entered Afrin, Syrian state media reported that Turkey had targeted them with shellfire.
The confrontation pits the Turkish army and allied Syrian rebel groups directly against the military alliance backing the government of President Bashar al-Assad, further scrambling northwest Syria's already messy battlefield.
Turkish President Tayyip Erdogan described the convoy as being made up of "terrorists" acting independently. He said Turkish artillery fire had forced it to turn back, although the Kurdish militia denied this.
A commander in the pro-Assad military alliance told Reuters the forces had turned back after coming under fire, but then resumed their progress and were now in Afrin.
Syrian television had earlier shown the group of fighters passing through a checkpoint that bore the insignia of the Kurdish security force, some chanting "one Syria, one Syria", and driving further into Afrin.
Ankara's month-old offensive is aimed at driving the Kurdish YPG militia, which it sees as a big security threat on its border, from Afrin.
The YPG hailed the arrival of the pro-government forces - which included militias allied to Assad but not the Syrian army itself - and said they were deploying along the front line facing the Turkish border.
It made no mention of a deal that a Kurdish official said on Sunday had been struck with Assad's government for the Syrian army itself to enter Afrin.
Erdogan said he had previously reached an agreement with Russian President Vladimir Putin and Iran's President Hassan Rouhani, Assad's main international backers, to block Syrian government support for the YPG fighters.
The commander in the pro-Assad alliance said Russia had intervened to "delay the entry of a large (number of) Syrian army forces" into Afrin.
Erdogan described the pro-government fighters coming to the YPG's aid as Shi'ite militias, and said they would pay a heavy price.
YPG media adviser Rezan Hedo denied Erdogan's assertion that the convoy had turned back under Turkish artillery fire, but he gave no details on its size or composition. A Britain-based monitoring group, the Syrian Observatory for Human Rights, said one convoy had entered Afrin while another turned back.
Turkish markets faced a broad sell-off in response to news seen as indicating that a swift victory for the Turkish campaign in Afrin could be more difficult than Ankara had expected, and that battle there could unsettle relations with Russia or Iran.
The lira weakened as much as 1.5 percent against the dollar, while stocks tumbled more than 2 percent – their biggest one-day drop in five weeks.
Turkey’s dollar-denominated bonds also came under pressure, with longer-dated issues dropping 1 cent. The cost of insuring exposure to its sovereign debt rose.
Earlier on Tuesday, Erdogan said he had received Putin's agreement to block a Syrian government deployment in Afrin.
Turkey and Russia have supported opposite sides throughout the war, with Moscow the closest ally of Assad and Ankara one of the principal supporters of rebels fighting to overthrow him.
However, in recent months Turkey has lent support to a Russian-led effort to end the war with most population centers in the hands of Assad's government. Ankara said last month it sought Moscow's agreement before launching the Afrin assault.
Russian Foreign Minister Sergei Lavrov said on Monday the Afrin crisis could be resolved through direct negotiations between Damascus and Ankara.
Assad's other main ally, Iran, is more closely involved than Russia with the militias that back the Syrian government on the ground, such as those who entered Afrin on Tuesday.
The Turkish offensive has made gains along almost all the border area with Afrin, pushing several km (miles) into Syria and seizing villages. But the YPG still holds most of the region including its main town, also called Afrin.
STRAINS WITHIN NATO
"The besieging of the Afrin city centre will start rapidly in the coming days," Erdogan said on Tuesday.
The entry of pro-government forces into Afrin draws more attention to the uneasy relationship between Damascus and the YPG. They have mostly avoided direct confrontation during the conflict, but the Kurds seek autonomy in regions they hold, while Assad has pledged to assert his control over all of Syria.
Kurdish political leaders have said they were forced to seek help from Assad's military because no foreign powers would help them against Turkish forces in Afrin.
Russia deployed military police in Afrin last year, but pulled them out last month before the Turkish offensive began.
The United States has armed the YPG as part of the Syrian Democratic Forces (SDF) alliance it backs against Islamic State. U.S. troops are on the ground in other parts of Syria run by the Kurdish-led administration, but not in Afrin.
Washington's support for the YPG has caused deep ructions in its relations with its NATO ally Turkey. In the case of the Afrin offensive, Washington has said it supports Turkey's right to defend itself, while calling for Ankara to show restraint.
(Reporting by Gulsen Solaker, Tuvan Gumrukcu and Ece Toksabay in Ankara, Ellen Francis, Lisa Barrington and Laila Bassam in Beirut and Polina Ivanova in Moscow; Writing by Angus McDowall; Editing by Andrew Roche and Gareth Jones)