Government sources told Turkish newspaper Today's Zaman that Istanbul was preparing a tit-for-tat response should Baghdad demand that Ankara replace consul general in Kirkuk, Muhittin Yazal.
An Iraqi commission last week considered Yazal's position in response to controversy surrounding a visit to Kirkuk by Turkish Foreign Minister Ahmet Davutoglu in August.
A spokesman for the Iraqi government had said Baghdad was taking a hard look at its ties to Ankara given Davutoglu's visit. Control over the oil-rich city is a matter of contention between the Kurdish and central government of Iraq.
Bilateral affairs with Ankara soured after U.S. military forces left Iraq in December. Ankara is harboring Iraqi Vice President Tariq al-Hashemi, who was sentenced to death in absentia by an Iraqi court on charges he operated a death squad in the country.
Ankara said it wouldn't hand the fugitive vice president over to the Iraqi government. Hashemi, a Sunni, said the charges are part of a political ploy by Iraqi Prime Minister Nouri al-Maliki, a Shiite.
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