The White House rejected Turkey's offer to release detained American pastor Andrew Brunson in exchange for the U.S. dropping an investigation into Turkish bank Halkbank, a senior White House official told The Wall Street Journal on Sunday.

Ankara offered to drop terrorism charges against Brunson if the U.S. pulled back the billions of dollars in fines it has brought against Halkbank. The U.S. reportedly declined the offer, setting in motion the possibility of further retaliatory measures against Turkey.

"A real NATO ally wouldn’t have arrested Brunson in the first place,” the source told the Journal.

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The Trump administration has turned Brunson's detention into a rallying call among Christian conservatives, particularly evangelicals, and the president has feuded with Turkish President Recep Tayyip Erdoğan openly over the American pastor. The U.S. has called the charges against him baseless.

Brunson has been held for two years after being accused of aiding the group accused of orchestrating the failed July 2016 military coup in Turkey.

A Turkish appeals court on Friday upheld Brunson’s house arrest.

Trump has threatened doubling tariffs on steel and aluminum from Turkey until Brunson is released. The White House has also sanctioned two top Turkish officials.

“Turkey has taken advantage of the United States for many years. They are now holding our wonderful Christian Pastor, who I must now ask to represent our Country as a great patriot hostage. We will pay nothing for the release of an innocent man, but we are cutting back on Turkey!” Trump tweeted on Thursday.

The clash between Turkey and U.S. has hurt Turkish markets, with its currency plummeting to record lows in recent months, the Journal reported.