NATO said Thursday that Greece and Turkey had agreed to talks to ease their dispute over eastern Mediterranean borders and energy rights, but Athens swiftly denied any deal on negotiations.

Alliance chief Jens Stoltenberg said he had won the two neighbours' agreement to enter "technical talks" designed to avert accident between their navies that could trigger a broader conflict.

A Greek frigate collided with a Turkish frigate in August and the two NATO members staged rival war games in the energy-rich but disputed region last week.

"Following my discussions with Greek and Turkish leaders, the two allies have agreed to enter into technical talks at NATO to establish mechanisms for military de-confliction to reduce the risk of incidents and accidents in the eastern Mediterranean," Stoltenberg said in a statement.

"Greece and Turkey are valued allies, and NATO is an important platform for consultations on all issues that affect our shared security."

But later Thursday Greece denied it had agreed to hold NATO-brokered talks with Turkey.

"Published information claiming Greece and Turkey have agreed to hold so-called 'technical talks' on de-escalating tensions in the eastern Mediterranean do not correspond to reality," Greece's foreign ministry said.

"De-escalation will only take place with the immediate withdrawal of all Turkish vessels from the Greek continental shelf," the ministry added.

- Turkey ready for talks -

Ankara said it backed the idea of talks at NATO.

"This initiative is supported by our country," the Turkish foreign ministry said in a statement. "We expect Greece to support the NATO secretary general's initiative."

The Turkish statement stressed that the talks would only focus on avoiding accidents and not resolving the sides' differences over maritime borders and energy exploration rights.

But observers still hope the talks will create an opening for further dialogue in a conflict that threatens to impede Europe's future access to a wealth of natural gas reserves.

NATO's announcement came after US Secretary of State Mike Pompeo urged the sides to reduce tensions and open diplomatic channels to ease the crisis.

Turkish President Recep Tayyip Erdogan this week extended a gas exploration mission near a Greek island at the epicentre of the longstanding rivals' latest dispute.

Erdogan on Tuesday vowed not to be intimidated by Greece's support from European military powers such as France.

The European Union has been watching the row with growing unease.

Germany had been spearheading efforts to get the sides to temper the rhetoric and settle their differences through talks.

The Turkish presidency said Erdogan held video conference talks with German Chancellor Angela Merkel on Thursday in which he condemned "the support given to Greece's selfish and unfair stance by some countries".

The EU threatened to put sanctions on Turkey if it refuses to solve the dispute through dialogue.

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