ISTANBUL, Turkey (AP) _ The bazaars in the heart of Istanbul's tourist district should be filled with tourists, the first waves of visitors before the summer rush.

But as Bektas Demir surveys the empty Arasta Bazaar, near the city's famed Blue Mosque, he has trouble even remembering the last sale he made at his ceramics shop.

``Oh yes, last week sometime I sold a couple plates and a vase to an Englishwoman,'' Demir said after a pause.

The lack of customers is one of many signs that Turkey's vital tourist industry faces a deep crisis as a U.S.-led coalition wages war in neighboring Iraq.

An estimated 70 percent of hotel reservations have been canceled for April and May, tourism experts said _ a worrying trend in a country where tourism accounts for the second-largest source of foreign exchange earnings.

``It's really dead,'' said Hayden Mann, a tour operator from New Zealand who said Internet bookings were down by nearly 60 percent.

This comes at a particularly bad time for Turkey, which is struggling to emerge from a deep financial crisis that resulted in the loss of some 2 million jobs and a debt of $150 million. Turkey lost billions in tourism revenue because of the 1991 Gulf War.

In this war, Turkey refused to let coalition forces use its territory to open a northern front against Iraqi President Saddam Hussein's regime, straining its long-standing ties with the United States and prompting the Bush administration to shelve a $6 billion aid package.

Before the war, Turkey was hoping to greet 15 million visitors this year to its Mediterranean coasts, its mountainous nature preserves and its Muslim and Christian historic sites. The government had projected $13 billion in tourism earnings.

Tourism Minister Guldal Aksit said Monday that Turkey could be spared much of the damage if the war ends quickly. But some in the tourism industry offered a bleaker outlook. Fehmi Kofteoglu, managing editor of a tourism Web site, notes that many reservations are already being canceled.

In the resort city of Antalya, about 25 hotels have postponed seasonal openings until at least May and many have delayed hiring staff, Kofteoglu said.

Normally in April, thousands of people from Australia and New Zealand would be visiting Turkey to commemorate their nations' historic World War I landing on the Gallipoli peninsula on April 25, 1915.

This year, the governments of Australia and New Zealand asked for extra security on the Gallipoli Peninsula amid fears that Australia's sending 2,000 troops to the Iraq war could draw reprisal attacks.

The United States has warned Americans to avoid Turkey and warned those already there to keep a low profile and vary travel routines.

A bomb attack on the British Consulate in Istanbul last week increased fears that foreigners may be targets in predominantly Muslim Turkey, where most people oppose the Iraq war.

No one was injured in the late night attack and Turks insist their country is safe. There have been no attacks on tourists in Turkey in years.

``Turkey is safe. There is no reason not to come,'' Aksit said.

The few tourists who could be found strolling through the centuries-old Covered Bazaar agreed.

``Iraq is far from here, so we came,'' said Genevieve Bureau, a French tourist on a week's holiday from Paris. ``We haven't been worried.''

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On the Web:

http://www.turkey.org/intro.html

http://www.Turizmgazetesi.com/