TURKEY has recalled its ambassador to Cairo as tensions with Egypt worsen dramatically following a bloody crackdown on supporters of the country's ousted Islamist president.
Egypt retaliated by recalling its envoy to Turkey, whose Prime Minister Recep Tayyip Erdogan has condemned what he called the "massacre" of peaceful protesters.
Erdogan, a supporter of former president Mohamed Morsi and his Muslim Brotherhood movement, has infuriated the interim government in Cairo by terming his ouster a military "coup".
Nearly 600 people were killed in the violence that erupted on Wednesday when security forces moved in to break up pro-Morsi protest camps, the worst unrest in the country since the 2011 uprising that unseated Hosni Mubarak - causing international criticism to poured in.
Erdogan, who heads Turkey's ruling Islamic-rooted Justice and Development Party (AKP), had forged a close alliance with Morsi since he was elected in the country's first free election in June 2012.
The Islamist leader was invited to the AKP's annual congress last September where Erdogan positioned Turkey as a regional standard-bearer.
"We have shown everyone that an advanced democracy can exist in a predominantly Muslim country," Erdogan told the congress.
"We have become a role model for Muslim countries."
Turkish leaders hinted they would not break ties with the new leadership emerging in Egypt after the military uprising, despite their criticism of the army's actions.
Analysts, however, said the bloody crackdown on demonstrators was a breaking point for Turkey, which would make it very hard for Erdogan's government to reconcile with the military regime in Egypt.
Turkey invested both politically and financially in Egypt after Morsi's election, aiming to bolster Ankara's influence and show that Turkey was not the only country where Islam and democracy could coexist.
Erdogan said his country served as a "very important reference" to Egypt on why military uprisings must not be tolerated.
This week's unrest in Egypt is expected to hit around 260 Turkish businesses operating in the Arab world's most populous country.
Turkish investment in Egypt amounts to nearly $US2 billion ($A2.2 billion), mostly in the textile and clothing industries.
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