The French parliament has postponed debate on a bill that would make it a crime to deny that the mass killing of Armenians in 1915 was "genocide".
Turkish protesters gathered outside the French consulate in Istanbul
Turkish officials and businesses had lobbied French MPs to shelve the bill, which relates to a thorny issue still plaguing Turkish-Armenian relations.
Turkey rejects Armenia's claim that the Ottoman Turks killed 1.5m Armenians.
The French Socialist opposition wanted a new law to impose fines in line with those for Holocaust deniers.
Anyone denying that six million Jews were killed by the Nazis in World War II can be fined up to 45,000 euros (£30,600) and be jailed for five years in France.
Armenia says up to 1.5 million Armenians were deported and died at the hands of the Ottoman rulers in World War I. Turkey says a few hundred thousand died in a war which also left many Turks dead.
Ahead of the debate, Turkish MPs had been lobbying their French counterparts, warning of irreparable damage if the bill passed into law.
It was set to be a free vote for French MPs, but President Jacques Chirac said that passing the bill would be a mistake.
Foreign Minister Philippe Douste-Blazy agreed, telling the National Assembly: "The Armenian cause is just and should be defended and respected. But the bill you have submitted today would, if passed, be considered as an unfriendly gesture by a large majority of Turks, whether you want this or not."
As the session ran out of time for a vote to take place, there were reportedly angry scenes as MPs and Armenian groups in the public gallery shouted: "Vote! Vote!"
There are some 400,000 people of Armenian descent in France, and the Socialists have been accused of trying to win their favour ahead of next year's presidential election.
Some European Union countries have passed bills recognising the killings as genocide and the European Parliament has backed a non-binding resolution saying Turkey must recognise it as such before it can join the EU.
The French bill will now be shelved until October at the earliest.