* Letter calls on group to condemn Israeli government's policies
* Group called Erdogan world's 'most virulent anti-Israeli leader'
* Letter says depicting criticism as anti-Semitism 'an obvious distortion'
ISTANBUL, July 29 (Reuters) - Turkish Prime Minister Tayyip Erdogan would be glad to return an award given to him by a Jewish-American association a decade ago, a letter released by his office showed on Tuesday, and it called on the U.S. group to condemn the Israeli government's policies.
The New York-based American Jewish Congress said in a letter to Erdogan last week that he had become the world's "most virulent anti-Israeli leader" and it demanded that he return an award it had given him partly for his efforts to broker peace between Israel and the Palestinians.
"Prime Minister Erdogan will be glad to return the award given back in 2004," Turkey's ambassador to Washington Serdar Kilic said in the letter addressed to American Jewish Congress President Jack Rosen.
Erdogan's office released a copy of the letter to the media, describing it as Turkey's official response.
"The absence of this award will not prevent Prime Minister Erdogan from resolutely fighting against terrorism, working towards the peaceful solution of the Israeli-Palestinian conflict and upholding the safety and well-being of the Jewish community in Turkey," the letter continued.
Rosen's open letter to Erdogan had cited the Turkish leader's recent comments that Israel had "surpassed Hitler in barbarism" through its attacks on Gaza.
Anti-Israeli sentiment runs high in Turkey, and Erdogan's rhetoric plays well with his base of largely conservative Sunni Muslim voters, who he hopes will hand him victory in Turkey's first direct election of a president next month.
There is widespread anger in Turkey at Israel's offensive in Gaza.
"Attempts to depict Prime Minister Erdogan's legitimate criticisms of the Israeli government's attacks on civilians as expressions of anti-Semitism is an obvious distortion and an effort to cover up the historical wrongdoings of the Israeli government," the ambassador's letter said.
"We would like to urge you to publicly condemn the Israeli government's policies that have caused public outrage around the world," it added.
More than 1,100 Gazans, most of them civilians, have been killed in the conflict. On the Israeli side, 53 soldiers have been killed as well as three civilians.
Israel said earlier this month it was reducing its diplomatic presence in Turkey after protesters pelted its consulate in Istanbul with stones and draped Palestinian flags on the ambassador's residence in Ankara.
The U.S. State Department called Erdogan's earlier remarks, in which he likened an Israeli MP to Hitler and said the Jewish state was terrorising the region, "offensive and wrong".
Turkey, a member of the U.S.-led NATO military alliance, was once Israel's closest regional ally. Washington considered it a credible broker in the Middle East peace process. (Writing by Daren Butler; Editing by Hugh Lawson)