Donald Trump said Lockheed is not exactly happy. (File Photo)

US President Donald Trump said on Tuesday it is "not fair" to either Turkey or the United States that Washington cannot sell Ankara billions of dollars worth of F-35 fighter jets after it bought a Russian air defence system.

Turkey started taking delivery of Russia's S-400 air defence system last week in defiance of U.S. warnings that doing so would mean the Pentagon would kick it out of the F-35 stealth fighter programme and that it could be subject to sanctions.

Washington's concern is that deploying the S-400 with the F-35 would allow Russia to gain too much inside information of the stealth system.

Buying military equipment from Russia also leaves the NATO member liable to U.S. sanctions retribution under a 2017 law known as the Countering America's Adversaries Through Sanctions Act, or CAATSA.

"It's a very tough situation that they're in, and it's a very tough situation that we've been placed in in the United States ... we'll see what happens. But it's not really fair," Trump told reporters at a Cabinet meeting at the White House.

"Because of the fact that you bought a Russian missile, we're not allowed to sell them billions of dollars' worth of aircraft. It's not a fair situation," Trump said, lamenting the jobs that would be lost.

"I would say that (F-35 manufacturer) Lockheed is not exactly happy," he said.

Trump's nominee to become defence secretary, Army Secretary Mark Esper, reaffirmed in his Senate confirmation hearing the Pentagon's long-standing position that Turkey could not have both the S-400 and F-35.

Esper testified to the Senate Armed Services Committee on Tuesday that he told Turkey's defence minister: "You can either have the S-400 or you can have the F-35. You cannot have both."

Secretary of State Mike Pompeo and Trump were reviewing "all of the options that are in the CAATSA legislation," State Department spokeswoman Morgan Ortagus said.

"I think that we've been pretty clear ... what the ramifications could be and I think that you saw those ramifications today when the president talked about the inability of Turkey now to have the F-35," she said.

"As it relates to which sanctions options will be chosen, we don't preview those sanctions in advance."

Turkey "Drifting Away"

If the United States removes Turkey from the F-35 programme and imposes sanctions, it would be one of the most significant ruptures in recent history in the relationship between the two nations.

Many U.S. officials, speaking on condition of anonymity, worry that Turkey is drifting away from NATO and watch improving relations between Ankara and Moscow with concern.

Esper said Turkey's decision to go forward with the S-400 purchase was disappointing.

"It is certainly disappointing, those are my words, very disappointing. Turkey has been a long-standing NATO ally, a very capable one," he said.

"It is very disheartening to see how they have drifted over the past several years."

Thomas Karako, an analyst at the Centre for Strategic and International Studies, said the F-35 -- the most advanced fighter jet in the U.S. arsenal -- flies with an exaggerated radar signature, making it difficult to track.

"Turkish operation of the two systems together - and more specifically, when it is in stealth mode - would allow the S-400 to acquire intimate knowledge of the F-35's radar signature," Karako wrote.

"Such insights would almost immediately find (their) way back to Russia, and the capability of F-35s around the world could thereby be degraded."

Turkish President Tayyip Erdogan has publicly suggested that Trump was not in step with others in his administration on punitive actions against Ankara. Erdogan said on Sunday Trump had the authority to waive sanctions.

Ankara has frequently played up what it sees as the strong relationship between Erdogan and Trump as a way of overcoming differences between the two countries.

Trump acknowledged those ties on Tuesday, even as he played down any idea that he was trying to "stick up for Turkey."

"I don't stick up for countries. I don't stick up for Turkey. I don't stick up - other than I've had a good relationship with President Erdogan," he said.