The U.S. official added that Turkey has a "prominent" position in Hamas's fundraising plans and the group is likely to benefit from that as it seeks more cash amid the war with Israel.

"We are deeply concerned about Hamas's ability to continue to raise funds and get financial support (here in Turkey) for possible future terrorist attacks," Nelson told reporters in Istanbul.

The United States, Israel's closest ally, has imposed sanctions on several Turkish entities and individuals as part of its efforts to curb funding to Hamas in the wake of the group's attack on Israel on Oct. 7.

Nelson said Turkey had been linked to Hamas's past efforts to raise funds from donors, investment portfolios, charities and nonprofit organizations.

He noted that even if Turkey saw Hamas as legitimate, the group could still violate local laws, but gave no specific example.

"There is ample opportunity for Turkey to address this problem under its domestic legal authorities regardless of U.S. sanctions," he said.

Nelson added that Turkish officials reminded him that the state does not consider Hamas a terrorist organization, but Turkey will also not tolerate violations of domestic laws including money laundering and direct financing of violence.

Washington says Hamas's investment portfolio, valued at hundreds of millions of dollars, includes companies operating in Turkey and several countries.