Turkey cancelled a visit by the Swedish defence minister over a demonstration by an anti-Islamic extremist in Stockholm, sparking a fresh crisis as Sweden tries to convince Ankara not to block its bid to join  Nato.

Turkish officials denounced the permission granted to Rasmus Paludan, a right-wing Swedish-Danish politician, to stage a protest on Saturday in front of its embassy in the Swedish capital.

After a diatribe of almost an hour in which he attacked Islam and immigration in Sweden, Paludan set fire to the Quran.

"If you don't think there should be freedom of expression, you have to live somewhere else," he told the crowd.

Turkish presidential spokesman Ibrahim Kalin said allowing the protest was "encouraging hate crimes and Islamophobia".

"The attack on sacred values is not freedom but modern barbarism," he tweeted on Saturday.

Last year, Paludan's announcement of a Quran-burning "tour" during the Muslim holy month of Ramadan sparked riots across Sweden.

A day after summoning the Swedish ambassador over Paludan's latest demo, Ankara said it had called off Defence Minister Pal Jonson's visit scheduled for January 27 and aimed at overcoming Turkey's objections to Sweden's Nato bid.

The meeting "has lost its significance and meaning, so we cancelled", Turkish Defence Minister Hulusi Akar said.

Jonson said the decision to postpone had been made jointly with Akar on Friday at the US military base in Ramstein, Germany, where Ukraine's allies were meeting to discuss further weapon supplies for Kyiv.

"Our relations with Turkey are very important to Sweden, and we look forward to continuing the dialogue on common security and defence issues at a later date," Jonson tweeted.

Condemnation poured in from the Muslim world.

The Organization of Islamic Cooperation bloc said the "provocative action... targets Muslims, insults their sacred values, and serves as further example of the alarming level reached by Islamophobia" and asked Sweden to punish those behind a "hate crime".

Saudi Arabia underscored "the importance of spreading the values of dialogue, tolerance and coexistence and rejecting hatred and extremism".

The United Arab Emirates said it was against "all practices aimed at destabilising security and stability in contravention of human and moral values and principles".

The Gulf Cooperation Council also condemned the protest.