ANKARA — Turkey on Tuesday slammed as discriminatory and racist a bill passed by the French senate making denial of the Armenian genocide a crime and vowed to impose unspecified sanctions against Paris on a "step-by-step" basis.

French Foreign Minister Alain Juppe appealed to France's "Turkish friends" for calm as Turks reacted furiously to the Senate's approval of the bill Monday.

"The proposal adopted in France is tantamount to discrimination and racism, and it violates freedom of thought," Erdogan said in an address to lawmakers in parliament.

The Turkish premier, who dismissed the bill as "null and void", warned however that his Islamist-rooted government would punish Paris with retaliatory measures if French President Nicolas Sarkozy, whose right-wing UMP Party initiated the bill, signs it into law.

Hundreds protested outside the French embassy in Ankara and the consulate in Istanbul, chanting slogans such as "Armenian Genocide Is an Imperialist Lie".

Armenia hailed the passage of the bill, President Serzh Sarkisian writing in a letter to Sarkozy: "France has reaffirmed its greatness and power, its devotion to universal human values."

The world's largest Muslim body, the Organisation of Islamic Cooperation, meanwhile rejected the bill as inconsistent with historical facts.

Armenians say up to 1.5 million of their forebears were killed in 1915 and 1916 by the forces of Turkey's former Ottoman Empire.

Turkey disputes the figure, arguing that 500,000 died, and denies this was genocide, ascribing the toll to fighting and starvation during World War I and accusing the Armenians of siding with Russian invaders.

Turkey's ally Azerbaijan blasted the French vote. The foreign ministry in Baku said the move was "against the principles of democracy, human rights, freedom of speech and expression".

France has already recognised the killings as a genocide, but the new bill would go further, by punishing anyone who denies this with a year in jail and a fine of 45,000 euros ($57,000).

The measure, approved by a vote of 127 to 85 in the French senate, makes it an offence punishable by jail to deny that the 1915 massacre of Armenians by Ottoman Turk forces amounted to genocide, drawing ire from Turkey.

Erdogan said: "We will implement our sanctions step by step, without any retreat. We'll publicise our action plan according to the developments on the ground."

Juppe, speaking on French television Tuesday, said: "I'd like to appeal to our Turkish friends for calm and extend my hand to this great country, this economic and political power."

It the bill takes effect, the law is expected to hurt diplomatic and trade ties between the two NATO allies, and Turkey has drawn up contingency plans.

"We are all prepared. The state's alternative plans are all ready," a senior Turkish foreign ministry diplomat told AFP.

Possible new sanctions include lowering diplomatic ties to the level of charge d'affaires and halting cultural and scientific cooperation.

The government has so far avoided calling for a full boycott of French products under pressure from the Turkish business community.

Trade between Turkey and France was worth 12 billion euros ($15.5 billion) in 2010, with several hundred French businesses operating here.

The Turkish press on Tuesday expressed collective fury over the bill, accusing France of breaching the right of freedom of expression.

"Shame on you, France" the daily Vatan said. "France, where the ideal of freedom was born, has delivered the hardest blow to the freedom of expression," it wrote. "In voting the bill on genocide denial, France has turned its back on its own past."