MANBIJ, Syria (Reuters) – Turkey ignored U.S. sanctions and pressed on with its assault on northern Syria on Tuesday, while the Russia-backed Syrian army roared into one of the most hotly contested cities abandoned by U.S. forces in Donald Trump’s retreat.

Reuters journalists accompanied Syrian government forces who entered the centre of the city of Manbij, a flashpoint where U.S. troops had previously conducted joint patrols with Turkey.

Russian and Syrian flags were flying from a building on the city outskirts, and from a convoy of military vehicles.

U.S. forces announced they had pulled out of the city.

A week after reversing U.S. policy and moving troops out of the way to allow Turkey to attack Washington’s Syrian allies, Trump announced a package of sanctions to punish Ankara.

But the measures – mainly a hike in steel tariffs and a pause in trade talks – were less robust than financial markets had expected, and Trump’s critics derided them as too feeble to have an impact.

The Turkish lira, which had fallen on the expectation of tougher U.S. measures, recovered after the sanctions were announced, as did its bond and stock markets, with traders noting that Trump had spared Turkish banks.

Trump’s unexpected decision to withhold protection from Syria’s Kurds after a phone call with Turkish President Tayyip Erdogan a week ago swiftly upended five years of U.S. policy in the Middle East.

The withdrawal gives a free hand to Washington’s adversaries in the world’s deadliest ongoing war, namely Syrian President Bashar al-Assad and his Russian and Iranian allies.

The United States announced on Sunday it was withdrawing its entire force of 1,000 troops from northern Syria. Its former Kurdish allies immediately forged a new alliance with Assad’s Russia-backed government, inviting the army into towns across the breadth of their territory.

TROOPS ENTER MANBIJ

Russian-backed Syrian forces moved swiftly to fill the void left by departing Americans from Manbij west of the Euphrates river, which Turkey has vowed to capture.

“We are out of Manbij,” said Colonel Myles B Caggins, spokesman for the U.S.-led coalition in Syria. Troops “are executing a deliberate withdrawal from northeast Syria.”

A group of journalists accompanied by Syrian army personnel journeyed into Manbij city where upon their arrival a group of people gathered, waving the Syrian flag and pictures of Assad.

However the reporters left when gunfire was heard and a group of some 10 young men in Kurdish YPG uniforms began breaking cameras and yelling.

Syrian state media said SDF fighters had opened fire on a march organised by the people of Manbij to welcome the army.

Trump’s pullout ends joint U.S.-Turkish patrols of the Manbij area under a deal aimed to persuade Turkey not to invade.

Syrian state television broadcast footage of what it said was government troops entering Manbij on Tuesday, under their new deal with the Kurds. A resident inside the city told Reuters the Syrian troops were on its outskirts. Turkey-backed Syrian fighters said they would continue their advance towards Manbij.

A Reuters cameraman on the Turkish frontier reported heavy bombardment on Tuesday morning of the Syrian border town of Ras al Ain, where a spokesman for the Kurdish-led Syrian Democratic Forces reported a fierce battle was taking place.

SANCTIONS ANNOUNCEMENT “FALLS VERY SHORT”

Trump has defended his reversal of U.S. policy as part of a plan to withdraw the United States from “endless” wars in the Middle East.

But his critics, including senior figures in his own Republican Party, cast it as a betrayal of the Kurds, loyal allies who lost thousands of fighters as the principal ground forces in Washington’s battle against Islamic State.

The Democratic speaker of the House of Representatives, Nancy Pelosi, said Trump’s sanctions were too little, too late.

“His announcement of a package of sanctions against Turkey falls very short of reversing that humanitarian disaster.”

Turkey says it aims to defeat the Kurdish YPG militia, which it sees as terrorists for their links to separatists in Turkey, and to create a “safe zone” where millions of Syrian refugees can be resettled.

The United Nations says 160,000 people have fled their homes as Turkish forces advance. The Kurdish administration puts the number of displaced at 270,000.

The U.N. Human Rights office said on Tuesday Turkey could be held responsible for war crimes by fighters under its direction, potentially including the assassination of Hevrin Khalaf, a leading Kurdish politician killed on the side of a highway on Saturday by gunmen who posted the incident on the Internet.

Turkish-backed fighters have denied blame for her murder.

Erdogan, who has pledged to continue military operations come what may, said Turkey was giving the world a chance to bring peace to the region.

“The international community missed its opportunity to prevent the Syrian crisis from pulling an entire region into a maelstrom of instability,” he wrote in the Wall Street Journal. “The European Union – and the world – should support what Turkey is trying to do.”

The Syrian army deployments into Kurdish-held territory evacuated by Washington are a victory for President Bashar al-Assad and his most powerful ally, Russia, giving them a foothold in the biggest remaining swath of the country that had been beyond their grasp.

Trump allies insisted Washington had not given its blessing to the Turkish offensive, and demanded a ceasefire.

“The United States of America simply is not going to tolerate Turkey’s invasion in Syria any further,” Vice President Mike Pence said. “We are calling on Turkey to stand down, end the violence and come to the negotiating table.”

Trump’s sanctions include reimposing steel tariffs and halting talks on a trade deal. But bilateral trade between Turkey and the United States is small – around a tenth the size of Turkey’s trade with Europe. Washington’s most effective form of economic leverage would be to hinder Turkey’s access to U.S. financial markets, a step Trump has so far avoided.

“The sanctions are not related to banking, so the markets will have a positive perception,” said Cem Tozge, asset management director at Ata Invest.

In a potentially more damaging blow, German carmaker Volkswagen said it was postponing a final decision on whether to build a 1 billion euro ($1.1 billion) plant in Turkey, citing concern over “current developments” after international condemnation of the incursion.

European countries have criticised the offensive but have limited their response so far to announcing suspensions of arms sales, although weapons account for only a small fraction of EU-Turkish trade.

Trump said U.S. troops would remain at a small garrison at Tanf in southern Syria “to continue to disrupt remnants” of Islamic State. The base on the southern border is hundreds of miles away from the Kurdish area in the north that had previously been the main U.S. theatre.

(Additional reporting by Ellen Francis and Tom Perry in Beirut, Tuvan Gumrukcu in Ankara, Can Sezer and Behiye Selin Taner in Istanbul; Writing by Peter Graff; editing by Mike Collett-White)