European Union leaders made good on Thursday on a 2016 promise to deepen trade ties with Turkey, but also warned Ankara to expect sanctions if it restarts exploration over disputed hydrocarbons in the eastern Mediterranean.

"Turkey has shown a more constructive attitude," European Commission President Ursula von der Leyen told reporters following the summit. "However, we also know this process of de-escalation remains fragile."

In a sign of lingering tensions, Turkey's Foreign Ministry said in a statement that the EU had no jurisdiction on drilling in the eastern Mediterranean.

In a statement, the Turkish Foreign Ministry said it hoped the conditionality of the steps the EU was willing to take and the postponement of their implementation to the bloc's next summit in June would not cause the positive momentum to be lost, while accusing the EU of violating international law by calling Turkish operations in the eastern Mediterranean illegal.

Aiming to reward President Tayyip Erdogan for pulling back from confrontation over gas exploration, the EU can now prepare for a deeper customs union with Turkey.

EU leaders said that their experts can "work on a mandate for the modernization of the customs union," according to a statement, allowing the 1990's-era trade agreement to be expanded to services, farm goods and public procurement.

The customs union expansion would bring Turkey, an EU candidate for membership of the bloc, fully into the internal market of the world's largest trading bloc, allowing almost all goods and services to flow unhindered and swelling its size by 80 million Turkish consumers.

The plan dates from 2016, when Turkey agreed to host Syrians fleeing civil war, but a host of disagreements between Ankara and Brussels over human rights, hydrocarbons and Turkey's stalled EU membership bid prompted EU states to hold back.

Read more: Eastern Mediterranean tensions dominate Turkey-EU talks

Negotiations could still take several years to complete and the EU is concerned that Erdogan could change course as he seeks a bigger regional role for Turkey, moving against the EU.

"We call on Turkey to abstain from renewed provocations or unilateral actions in breach of international law," EU leaders said in the statement, saying they will review progress in June.

The EU also threatened in the statement "to use the instruments and options at its disposal to defend its interests," referring to travel bans and asset freezes on Turkish individuals, as well as sanctions on important sectors of the economy such as energy and tourism.

(With input from agencies)