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By Ezgi Erkoyun

ALIAGA, Turkey (Reuters) - An American pastor being tried in Turkey on terrorism and spying charges could be freed on Wednesday when prosecution witnesses finish testifying in a case which has deepened a rift between two NATO allies, his lawyer said.

Andrew Brunson, a Christian pastor from North Carolina who has lived in Turkey for more than two decades, was indicted on charges of helping the group that Ankara blames for the failed 2016 coup against President Tayyip Erdogan, as well as supporting outlawed PKK Kurdish militants.

He was detained nearly two years ago and faces up to 35 years in prison if found guilty. Brunson denied the charges, calling them "shameful and disgusting".

President Donald Trump has called for his release and the U.S. Senate passed a bill last month including a measure that prohibits Turkey from buying F-35 Joint Strike Fighter jets because of Brunson's imprisonment and Turkey's purchase of Russia's S-400 air defence system.

Defence lawyer Ismail Cem Halavurt said Turkish courts can remand defendants in detention while evidence is collected, to prevent any interference. That process is expected to be concluded on Wednesday when the final three prosecution witnesses are due to be heard, meaning he could be freed for the remainder of the trial.

"We have been saying that he must be released under the law since day one," Halavurt said. "We expect him to be released following the completion of the evidence collection".

Brunson was pastor of the Izmir Resurrection Church, serving a small Protestant congregation in Turkey's third largest city, south of the Aegean town of Aliaga where he is now on trial.

His trial is one of several legal cases which have raised tensions between Washington and Ankara. A U.S. judge sentenced a Turkish bank executive in May to 32 months in prison for helping Iran evade U.S. sanctions, while two locally employed U.S. consulate staff in Turkey have been detained.

The NATO allies are also at odds over U.S. policy in Syria, where Washington's ally in the fight against Islamic State is a Kurdish militia Turkey says is an extension of the PKK, which has waged a three-decade insurgency in southeast Turkey.

Hints of possible rapprochement have appeared, however, with an agreement for Turkish and U.S. military patrols around the northern Syrian town of Manbij. The State Department said on Monday it was working with Turkey on the possible sale of a Raytheon Co Patriot missile defence system.

The Turkish government says Brunson's case will be decided by the courts. But Erdogan has previously linked his fate to that of Fethullah Gulen, the U.S.-based Muslim cleric Turkey blames for the coup attempt and whose extradition Ankara seeks.

Gulen has denied having any link to the failed coup, in which at least 250 people were killed.

(Writing by Ezgi Erkoyun; Editing by Dominic Evans/Mark Heinrich)

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Reuters