President Recep Tayyip Erdogan on Saturday warned Greece it would pay a "heavy price" if it kept on harassing Turkish fighter jets over the Aegean and hinted at military action.

The two uneasy NATO neighbours have long-standing sea and air boundary disputes which lead to near-daily air force patrols and interception missions mostly around Greek islands near Turkey's coastline.

"Hey Greece, take a look at history. If you go further, you will pay a heavy price," Erdogan told a packed rally in the Black Sea city of Samsun.

Greece and Turkey have a fraught history going back centuries with disputes over maritime borders and the 1974 division of Cyprus.

Turkey has in recent months complained of what it calls provocative actions by Athens, saying such moves undermine peace efforts.

In one such incident, Ankara said last weekend Greece had used a Russian-made air defence system to harass Turkish jets on a reconnaissance mission in what it termed a "hostile action".

In his address, Erdogan accused Greece of "attempting to threaten us with S-300s".

Athens has dismissed the allegations and often accuses Ankara of overflying Greek islands.

Turkey says Greece is stationing troops on islands in the Aegean Sea in violation of peace treaties signed after World Wars I and II.

- 'Don't forget Izmir'-

An infuriated Erdogan accused Greece of "occupying" the islands.

"We have only one word to tell Greece: Do not forget Izmir (Smyrna in Greek)," Erdogan said, referring to the end of the Greek occupation after Turkish forces entered the city in the Aegean coast in 1922.

"Your occupation of the islands does not bind us," Erdogan said.

"When the time comes, we will do what's necessary. As we say, we may come suddenly one night", using his often-repeated words when he threatens to launch an operation into neigbouring Syria.

In June, Turkish Foreign Minister Mevlut Cavusoglu said Ankara would challenge Greece's sovereignty over the islands if it continued to send troops there.

The Aegean Sea has a complex geography with over 2,000 islands, most of them Greek.

The two countries came to the brink of a war in the 1990s over a pair of small uninhabited islets known collectively as Kardak in Turkish and Imia in Greek.

Erdogan cut off dialogue with Greece after accusing Greek Prime Minister Kyriakos Mitsotakis of lobbying against US arms sales to his country.

Mitsotakis "no longer exists" for him, he fumed in May.

Greece and Turkey are also competing for US arms.

In June, Greece formalised a request for US-made F-35 fighter jets.

Turkey is negotiating for F-16 purchases after Washington kicked Ankara out of the F-35 programme for taking delivery of an advanced Russian missile defence system in 2019.

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