By Lesley Wroughton

WASHINGTON (Reuters) - A Turkish delegation met with the State Department's No. 2 official, John Sullivan, on Wednesday to address friction between the NATO allies fueled by Ankara's detention of Americans including an evangelical pastor.

The delegation of roughly half a dozen officials arrived at the State Department led by Turkish Deputy Foreign Minister Sedat Onal and Turkey's ambassador to Washington Serdar Kilic.

They did not answer questions from reporters as they left their meeting with Sullivan, the deputy secretary of state, about an hour later.

 

A U.S. Treasury spokeswoman said the delegation would also meet Treasury officials on Wednesday.

The Treasury meeting comes amid concerns in Ankara about U.S. sanctions imposed by Washington last week against President Tayyip Erdogan's justice minister and interior minister, and concerns over a fine against Turkey's state-owned Halkbank for allegedly helping Iran evade U.S. sanctions.

The two countries also remain at odds on a core U.S. demand that Ankara free pastor Andrew Brunson..

State Department spokeswoman Heather Nauert confirmed on Tuesday that Secretary of State Mike Pompeo spoke to his Turkish counterpart on Monday but said the two sides had not reached agreement on the release of Brunson.

The pastor had been imprisoned by Turkey since October 2016 but was released to house arrest in late July.

Brunson, an evangelical Presbyterian pastor from North Carolina, was jailed for allegedly supporting a group that Ankara blames for an attempted coup in 2016. Brunson denies the charge. Washington is also seeking the release of three locally employed U.S. embassy staff.

Trade issues and differences over Syria have also strained bilateral ties.

Washington is reviewing Turkey's duty-free access to U.S. markets, while Ankara has imposed retaliatory tariffs on U.S. goods in response to American steel and aluminum tariffs. The U.S. review could affect $1.7 billion of Turkish exports.

The chill in relations with Washington has hurt investor confidence in Turkey, which relies on overseas capital to fund its widening current account deficit. The Turkish currency, the lira, has collapsed this year, putting pressure on banks and corporate loans.

The lira on Wednesday weakened to 5.3 against the dollar, hovering close to the record low it reached on Monday, 5.4250 per dollar. <TRYTOM=D3>

(Additional reporting by Daphne Psaledakis; Writing by Lisa Lambert; Editing by Steve Orlofsky and Tom Brown)

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