"What I hope now is that our Turkish friends do not overreact about the French National Assembly decision," Juppe said. "We have lots of things to work on together."
However, Turkish Prime Minister Recep Tayyip Erdogan ordered a freeze on economic, military and political cooperation with France, a measure timed with ongoing NATO consultations on what to do with Syria amid mounting violence there, with Iran amid a tense stand-off over its nuclear program and the Strait of Hormuz oil waterway in the Persian Gulf, and with Iraq over a perceived Iranian threat after the U.S. pullout.
Turkey is outside the European Union but is NATO's key partner in the Middle East. Its bases are regularly used by NATO forces for operations in the region.
Erdogan accused Sarkozy of seeking populist appeal in the hope of re-election in April presidential race.
"Efforts of gaining votes using Turcophobia and Islamophobia just to win the presidential elections in France for personal ambitions raises concerns, not only in the name of France, but also in the name of all Europe and universal values of Europe," Erdogan said.
Around 500,000 citizens of Armenian descent are seen as a key source of support for Sarkozy and his party ahead of presidential and legislative elections in April and June next year.
The law will make denial of any mass killings that are recognized by the state as genocide a crime punishable by a one-year prison sentence and a $58,000 fine.
It will put the controversy over the Armenian killings on a par with punishment for denial of the Holocaust and the deaths of Jews, gypsies and other minorities under Nazi Germany.
So far only the Holocaust and the Armenian deaths are recognized by France as genocide, and punishments apply to denial of the Holocaust.
About 20 other countries, including Italy, Canada and Russia have formally recognized genocide against the Armenians.
Turkey says it cannot be held accountable for events in the Ottoman Empire. It also disputes the deaths of Christian Armenians by Ottoman Turks as a systematic genocide, the numbers of deaths cited in claims and counter claims and maintains that Turks and other nationalities also suffered during the conflict.
Algeria joined the escalating war of words, calling on France to apologize for what it termed genocide of its people during the French occupation. Erdogan said evidence pointed to French occupation forces using ovens to exterminate Algerians en masse, for which he said an apology was overdue.
It's the third time France has faced Turkish ire over the Armenian genocide controversy, each time losing trade and political privileges.
French-Turkish trade this year exceeded $13.5 billion. In 2001, when France recognized the Armenian deaths as genocide, it lost 40 percent of its exports to Turkey. In 2006, Turkey responded to a similar genocide bill in the National Assembly by freezing military ties with France. That bill was eventually dropped by the French Senate.
French Foreign Ministry spokesman Bernard Valero sought to placate Ankara, saying the bill wasn't a Sarkozy initiative and Turkey was bound by bilateral and international accords and couldn't impose a trade embargo. Officials in Ankara said a boycott of France would go ahead.
The vote is up for review in the National Assembly before it goes to the Senate next year.
Unlike recession-bound EU states, Turkey is having growth rates in excess of 8 percent. The eurozone crisis has turned many Turks away from the idea of joining the EU, which France, and several other EU members, firmly opposes anyway.
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