For France, it was the final straw. For Turkey, it was a misunderstanding. For NATO, it could be a turning point.
The incident unfolded quickly in the eastern Mediterranean on June 10, when a French frigate under NATO command tried to inspect a Tanzanian-flagged cargo ship suspected of smuggling arms to Libya in violation of a U.N. embargo.
The French armed forces ministry, speaking on behalf of the government, said the frigate was harassed by three Turkish navy vessels escorting the cargo ship. A Turkish ship flashed its radar lights and its crew put on bulletproof vests and stood behind their light weapons, it said.
Turkey disputes this. It denies trafficking arms to Libya and says the cargo ship, the Cirkin, was carrying humanitarian aid. It has accused the French navy of aggression.
Turkey's ambassador to France, Ismail Hakkı Musa, said on July 1 the three Turkish warships were helping NATO enforce the U.N. arms embargo.
NATO ordered an investigation, but its contents are classified and NATO has not commented on its outcome. Two European diplomats told Reuters that France sent a letter to NATO Secretary-General Jens Stoltenberg in early July saying the report did not "correctly establish the facts."
The U.S. Pentagon declined to comment on the incident.
For France, the incident highlights what many NATO allies see as President Tayyip Erdogan's tendency to act against the Western alliance's interests and values.
After a series of disagreements, from Turkey's purchase of weapons from Russia to gas drilling operations near Cyprus, France concluded that suspicions of Turkish arms smuggling to Libya were too serious to ignore, four NATO diplomats and officials told Reuters.
France has suspended its participation in NATO's Mediterranean mission, Sea Guardian, instead offering its assets to a European Union mission that is upholding the U.N. arms embargo but does not involve Turkish ships, diplomats said.
"What do you do when you have a NATO surveillance mission ... and one of those in the alliance is the one doing the trafficking, while saying it is implementing the (U.N.)embargo?" said an official from France's armed forces ministry, requesting anonymity because of the sensitivity of the matter.
The United States, frustrated by Turkey's purchase of Russian S-400 missiles and its military operations in Syria, has been seeking to calm the tensions in NATO, the diplomats said.
Last October, U.S. Secretary of Defense Mark Esper said Turkey was "going in the wrong direction". While U.S. President Donald Trump enjoys a close relationship with Erdogan, he urged Turkey in May to help de-escalate the Libyan conflict.
The Pentagon "strives to preserve our relationship with Turkey while encouraging the Turkish government to pursue more constructive policies regarding the S-400 and other areas of disagreement," said U.S. Army Lieutenant Colonel Thomas Campbell, a Pentagon spokesman.
French Armed Forces Minister Florence Parly told the European Parliament on July 2 that NATO must make Ankara realise it cannot "violate" NATO rules. But French diplomats also say Paris is not looking to expel Turkey, and NATO has no formal mechanism to punish or expel members.
Still, NATO could threaten to remove assets from Turkey, such as a radar, Patriot missiles or NATO AWACS aircraft.
French Foreign Minister Jean-Yves Le Drian wants EU foreign ministers to consider new sanctions on Ankara during a video meeting on July 13.
"The main problem for Europe is Russia. The ambivalence of Turkey, with one foot in each camp, is the troubling factor," said Marc Pierini, a former EU ambassador to Turkey with the Carnegie Europe think tank.
Turkey has the second-largest military in NATO and gives the alliance a strategic presence, notably on the Black and Mediterranean seas.
"Imagine NATO without Turkey! You would have no NATO," ambassador Musa said.
France made four concrete demands of NATO in its July letter to Stoltenberg, the contents of which were laid out to Reuters.
It wants all 30 allies to reaffirm commitment to respecting the U.N. arms embargo on Libya, to ensure NATO signals are not used during national missions, to improve coordination between the NATO and EU missions in the Mediterranean, and to avoid similar incidents in the future.
At the last NATO defence ministers' meeting in late June, via video link, eight countries including Germany, Italy and Spain backed seeking a more cooperative approach from Turkey.
French diplomats cite Turkey signing off on a NATO defence plan for the Baltics and Poland late last month, after holding it up for months, as a first sign of success.
Yet there is a risk of a long-term rift at NATO if Erdogan does not change course, analysts say.
"Turkey considers itself big enough now to be independent from all sides," Pierini said.