Turkey's Prime Minister Tayyip Erdogan blasted France for passing a bill that criminalizes the denial of genocide.
The bill specifically relates to the 1915 mass killing of Armenians by Ottoman Turks.
It means that those who do not acknowledge the event (that saw roughly 1.5 million Armenians killed) as genocide will be prosecuted.
Turkey, which has an embassy in Paris, is furious and argues that the bill prohibits freedom of expression.
The Turkish government has retaliated by taking measures that will likely add strain to already tense foreign relations between the two countries.
Turkish ambassador Tahsin Burcuoglu, who was in Paris when the bill was passed, has returned to Turkey in protest.
A number of meetings that Turkey had planned in Paris have been canceled and Turkish civilians have taken to the streets on Istanbul to vent their anger.
"This is politics based on racism, discrimination and xenophobia. This is using Turkophobia and Islamophobia to gain votes, and it raises concerns regarding these issues not only in France but all Europe," Erodgan said at a news conference.
"This bill has removed the free discussion atmosphere (in France). The principles of liberty, fraternity and equality, which form the basis of the French revolution, have been trampled on," he added.
Erodgan accuses French Prime Minister Nicolas Sarkozy of passing the bill simply to win political votes at the next election.
After the 1915 killing of millions of Armenian civilians by Turks, many Armenians migrated to France where today they account for an estimated 300,000 of the entire French population.
Erodgan suggested that Sarkozy welcomed the bill simply to gain ethnic Armenian votes.
"Turkish-French ties are not just 50-100 years old. It is a centuries-old strong relationship, a process that Mr.Sarkozy sacrifices for the sake of political calculations. This bill will do more injustice to French people than it does to Turks," Erdogan said.
For decades Turks have rejected the term 'genocide' because many find it offensive claiming it insults Turkish culture.
The bill is expected to reach the senate in 2012, where it will be up for political debate.
"This step will open heavy wounds that will be difficult to heal in Turkish-French ties," he said. "This is the first step, the first stage of measures, and they will be implemented decisively," Erdogan said.