By Ezgi Erkoyun and Ece Toksabay

ISTANBUL (Reuters) - Turkey's lira slid more than one percent against the dollar on Friday after President Tayyip Erdogan said U.S. President Donald Trump's move to recognise Israeli sovereignty over the Golan Heights brought the region to the brink of a new crisis.

The lira, which lost nearly 30 percent of its value against the dollar last year thanks in part to a spat between Ankara and Washington, eased around 1-1/2 percent to 5.5475 against the U.S. currency by 0953 GMT, from a close of 5.4650 on Thursday.

Earlier it weakened as much as 5.5810, which would be its lowest closing value since October. Turkey's main stock index also slipped, and its dollar bonds fell across the curve.

Piotr Matys, emerging markets forex strategist at Rabobank, said worries over rising diplomatic tension between Turkey and the United States was behind the lira's drop.

"The market is essentially concerned that as witnessed last year in August, diplomatic tension could escalate quite substantially," he said.

(Graphic - Turkish lira weakens as worries over Turkey-U.S. relationship grows, https://tmsnrt.rs/2HzXdMc)

Last year, the lira hit a record low of 7.24 against the dollar in August, as Turkish-U.S. ties were strained by the trial of a U.S evangelical pastor who had been detained in Turkey.

In a speech Friday to a meeting of the Organisation of Islamic Cooperation, Erdogan said Trump's statement on Golan Heights risked a crisis and added that "we cannot allow the legitimisation of the occupation" by Israel.

"These levels came after Erdogan's comments on Israel. We know that ahead of the March 31 elections locals are more inclined to buy," a bank's forex trader said, adding that a close above 5.55 may create a new technical risks for the lira.

The main Istanbul bourse index BIST 100 was down 1.75 percent at 0955 GMT, while the banking index was down 2.61 percent.

Turkey's dollar bonds also slid following Erdogan's comments, with the 2043 issue tumbling more than 2 cents to its lowest since mid-January, according to Tradeweb data. The cost of insuring exposure to Turkey's sovereign debt rose to the highest level since mid-January.

(Additional reporting by Tuvan Gumrukcu, Ali Kucukgocmen and Tom Arnold in London; Editing by Jonathan Spicer)