ANKARA, Dec. 3 -- The war of words between Turkey and Russia has shown no sign of abating after the Turkish air force shot down a Russian fighter jet on the Syrian border on Nov. 24.

"We will not forget this aid to terrorists. We have always considered betrayal the worst and most shameful act," Russian President Vladimir Putin said in his annual state of the union address before the Federal Assembly on Thursday.

He repeated his earlier accusations that Turkey has ties with terrorist groups in Syria and Iraq, and promised more sanctions on Turkey over downing of the Russian jet.

Within hours, Ankara felt once again compelled to dismiss Russian claims, with Turkish President Recep Tayyip Erdogan turning the table around on Russia and claiming it is in fact Russia that is involved in oil smuggling with the Islamic State (IS).

"We possess documents (proving these claims) and we have started revealing these to the world," Erdogan said.

The Turkish president also said if Putin proved that he and his family members were profiting from illegal oil smuggling scheme run by the IS, he would immediately offer his resignation.

"Ankara has never experienced such a deep crisis with Moscow, not during the Soviet era nor in the years that followed the 1991 collapse of the Soviet Union," Hasan Kanbolat, director of Ankara Policy Center.

"Neither Ankara nor Moscow has anything to gain from the deepening of this crisis," he underlined.

Turkish and Russian leaders have neither shown willingness to defuse the tension nor restrained in their remarks against each other.

Before departing for Azerbaijan on an official visit, Turkish Prime Minister Ahmet Davutoglu said on Thursday that Russian claims about Turkey are nothing but lies that are reminiscent of the Cold War.

"Nobody pays attention to these lies generated by Soviet-like propaganda machine," he remarked.

Later on the same day at a joint press briefing with Azerbaijani President Ilhan Aliyev, the Turkish prime minister vowed that Turkey would never allow any country to challenge its sovereign rights in air, land and sea borders.

His remarks came hours before an anticipated meeting between Russian Foreign Minister Sergey Lavrov and his Turkish counterpart Mevlut Cavusoglu on the sidelines of the Organization for Security and Cooperation in Europe ministerial council meeting in Belgrade.

Davutoglu said his foreign minister will repeat the same position to Lavrov in the meeting.

The encounter will be the first high-level official meeting between the two sides since the incident took place last week. Putin has dodged Erdogan's request to talk face to face in Paris on Monday on the sidelines of the climate summit.

Russia demands that Turkey must offer an apology for the downing of the jet, pay compensation to relatives of the killed pilot, and launch investigation to punish those who were responsible for the shooting incident.

Ankara ruled out the apology, citing a claim that the incident took inside the Turkish air space, even though Moscow denied that his SU-24 combat fighter jet made an incursion into the Turkish air space.

Turkey has been hit by a wide range of sanctions, mostly economic, that are imposed by Russia, after the first downing of a Russian jet by a NATO member country in over half a century.

Turkey's main opposition Republican Peoples' Party estimated that the Russian sanctions might cost the Turkish economy up to 20 billion U.S. dollars annually, mainly from loss of trade, tourism and contracts.

"Moscow's initial reaction hints at a deliberate assault on Turkey's economy and especially its most vulnerable dimension: the balance of payments," Ibrahim Turkmen, an economist, said.

Turkish exports already dropped by 8.6 percent during the first 11 months year-on-year in 2015 to 131.94 billion dollars, according to Turkish Exporters' Assembly (Tim) earlier this week.

Tim Chairman Mehmet Buyukeksi said Turkey has an export volume to Russia worth 3.7 billion dollars, which corresponded to three percent of Turkey's overall exports.

"Let's hope that we maintain good ties with Russia," he said, adding that exporters will try to compensate their losses by finding other markets in case relations will not recover with Russia.

On Wednesday, Turkey's state-owned Turkish Petroleum Pipeline Corporation signed a deal with the Qatari national petrol company regarding the long-term supply of liquid natural gas to Turkey.

The move came amid concerns that Russia may cut its supply of gas to Turkey, which now imports 55 percent of its natural gas supply and 30 percent of its oil needs from Russia.