Turkey may have deliberately targeted US forces with artillery in northern Syria in order to push them out, coalition sources have told the Daily Telegraph.
US officials confirmed an explosion occurred near where a small contingent of its special forces were based on a hill near the town of Kobane.
They said the cause of the explosion had not been confirmed but local reports suggested it was either an artillery or air strike. No US personnel were injured.
It was the first time a coalition base had come under fire since Turkey’s offensive began. US warplanes flew over the base immediately after the incident.
Turkey’s defence ministry denied targeting the US position, saying its forces were responding to Kurdish fire that originated nearby.
A spokesman said: "There was no firing on the US observation post. The firing was ceased as a result of the issue being relayed to us by the US."
But a coalition source said there was nothing else around in the area that the Turks could have been targeting, apart form the US forces.
"It’s likely they are trying to push us out. Kobane is the heart and soul of the Kurds," a source said. "If Turkey can get us to leave it’s all over."
A US official in Washington said an explosion had occurrednear the US military outpost, but no personnel were hurt.
The official said the source of the explosion was unclear, but it coincided with Turkey’s offensive against the Kurds.
US troops were in the outpost at the time of the explosion but there had been no further activity since.
Before the explosion Chairman of the Joint Chiefs of Staff General Mark Milley said Turkey had been informed of US positions in Syria.
Speaking at the Pentagon he said: "The Turkish military is fully aware, down to explicit grid coordinate detail, of the locations of US forces.
"Everyone is fully aware that we are the United States military. We retain the right of self-defence."
It came after the US defence secretary pleaded with Turkey to stop its offensive on Kurdish-held northern Syria before it was “irreparable”, as the civilian death toll rose and 100,000 were forced to flee their homes.
In the strongest condemnation of the assault since Donald Trump gave Turkey’s President Recep Tayyip Erdogan his blessing on Sunday, Mark Esper said Ankara faced “serious consequences” if it did not rein in its forces in Syria.
"As part of the call, Secretary Esper strongly encouraged Turkey to discontinue actions in northeastern Syria in order to increase the possibility that the United States, Turkey and our partners could find a common way to de-escalate the situation before it becomes irreparable," read a statement released in his name.
Mr Trump’s green light for so-called Operation Peace Spring has turned amber in the face of international pressure.
The president called the invasion a “bad idea” on Thursday and even offered to mediate between Turkey and Syrian Kurdish forces.
"We have one of three choices,” he tweeted on Thursday night. “Send in thousands of troops and win Militarily, hit Turkey very hard Financially and with Sanctions, or mediate a deal between Turkey and the Kurds!"
“I hope we can mediate,” he told reporters later when asked about the options.
Facing increasing pressure to stop Turkish and allied Syrian rebel forces going deeper in Syria, the US set out red lines for their offensive.
“That would include ethnic cleansing. It would include in particular indiscriminate artillery, air and other fire directed at civilian population,” a senior US official said, spelling out what Turkish actions would trigger US sanctions.
“That is what we’re looking at right now. We have not seen significant examples of that so far.”
Mr Trump warned Turkey to act with moderation and safeguard civilians. But the barrages of the invasion so far showed little sign of holding back.
Residents along the border fled with their belongings loaded into cars, pickup trucks and motorcycle rickshaws, while others escaped on foot.
The UN refugee agency said tens of thousands were on the move, and aid agencies warned that nearly a half-million people near the border were at risk.
France, which has come out strongly against the assault, said the European Union would discuss imposing sanctions on Turkey at a summit on Monday.
The Netherlands suspended arms exports to Turkey yesterday, following Norway and Finland and Sweden, which plans to push for an EU-wide suspension.
US senators, meanwhile, have been drawing up plans for their own possible sanctions.
Without elaborating, Mr Trump also said the US was "going to possibly do something very, very tough with respect to sanctions and other financial things" against Turkey.