Disputes between Ankara and Paris over Armenian genocide claims and Turkey's bid to join the European Union should not be allowed to hurt business ties, France's foreign trade minister said on Tuesday.

France's lower house of parliament infuriated the Turks in 2006 by backing a bill that would make it a crime to deny that mass killings of Armenians by Ottoman Turks during World War One amounted to genocide. France's Senate never ratified the bill.

French President Nicolas Sarkozy has also upset Turkey by opposing the large Muslim but secular nation's EU entry bid.

"It is true that political disputes have affected economic decisions ... but (business) decisions should be taken on economic grounds," Herve Novelli said after signing an 80 million euro ($117.8 million) credit deal between Turkey's Halkbank and the French Development Agency.

Ankara has opposed Gaz de France's involvement in a natural gas pipeline project because of the genocide bill.

Last week, the European Union's coordinator for the proposed Nabucco pipeline said during a visit to Ankara that Gaz de France should not be excluded from the project, which aims to carry Caspian gas to Europe via Turkey and the Balkans.

But Energy Minister Hilmi Guler described Nabucco as a done deal and noted that its partners had agreed on Germany's RWE as the sixth partner, eliminating Gaz de France.

NUCLEAR PLANT

Novelli said France was upset by the decision to exclude Gaz de France but he said he was looking ahead and hoped Ankara would favour French firms in an upcoming tender for construction of Turkey's first nuclear power plant.

"The international expertise and skill of French firms in nuclear energy gives us the confidence that Turkey will make its decision on rational grounds," Novelli told reporters through an interpreter after talks with Turkey's energy minister.

The Turkish government is expected to announce tender conditions on Feb. 21 for a nuclear power plant expected to have a capacity of 4,000 MW.

Novelli, trying to play down the genocide bill, said he was confident the French Senate would not pass it into law.

Ankara strongly denies Armenian claims, backed by many Western historians, that the killings of Armenians in 1915-16 constituted a systematic genocide.

France is home to a large ethnic Armenian diaspora.

Despite the political disputes, trade between Turkey and France totalled nearly 10 billion euros in 2007. France is Turkey's forth biggest export market and French companies rank third in total foreign direct investment in Turkey.

"We want to develop our economic relations further. I want to give a positive signal by being here. Problems between countries are normal and they should be resolved through friendly dialogue," Novelli said.

French Development Agency board member Luc Rigouzzo told Reuters the agency would extend 600 million euros to development projects in Turkey in the next three years. The agency has already extended 600 million euros loan in the last three years.