Russia and Turkey are working on a contract for the delivery of a new batch of Russian S-400 missile systems, the Interfax news agency cited a senior official at a Russian military cooperation agency as saying on Friday. 

Moscow hopes to seal a deal to supply Turkey with more S-400 systems in the first half of next year, the head of Russian state arms exporter Rosoboronexport said last month. 

Washington has been at loggerheads with Turkey, one of its North Atlantic Treaty Organization (NATO) ally, over the decision. It claims that having a Russian missile system settled on Turkish soil would compromise the security of the F-35 project and is not aligned with the common interests of NATO, which sees the Kremlin as a major threat.  

The White House warned Turkey of "very real and negative (economic) consequences" through the enactment of the Countering America's Adversaries Through Sanctions Act (CAATSA) when Ankara began receiving parts of the S-400 air defense system in mid-July this year. 

Shortly after the delivery process started, Washington suspended Ankara from the U.S. F-35 stealth fighter jet program, in which it was a producer and buyer, to penalize Turkey for buying S-400 batteries.  

The issue for Turkey now is what other forms of sanctions there would be and when they would be imposed. 

The U.S. State Department had previously set a deadline of July 31 for Turkey to suspend the S-400 deal. 

Earlier this month, two U.S. senators issued a letter urging sanctions against Turkey in a move less than a month after the November visit by Turkish President Recep Tayyip Erdogan to the White House. 

At the December 3-4 NATO summit, U.S. President Donald Trump said the two sides remained in talks on the issue. 

U.S. Secretary of Defense Mark Esper on Thursday said there had been "no movement" with regard to getting Turkey to abandon the Russian S-400 missile system after he took part in meetings with the Turkish side at the summit in London.  

"We are where we are, there is no movement at this point," Esper told Reuters in an interview, adding "where they are going with S-400s is the wrong direction." 

Relations between America and Turkey have become strained in recent years over U.S. support for the Kurdish YPG fighters in northern Syria, which Turkey's ruling AKP sees as an affiliate of the outlawed Kurdistan Workers Party (PKK) and Washington's refusal to extradite the U.S.-based Muslim cleric Fethullah Gulen, whom Ankara blames for masterminding the failed coup attempt of July 2016. 

(With input from Reuters, Xinhua)