WASHINGTON, Oct 3 (Reuters) - The U.S. Supreme Court on Monday agreed to hear Turkish state-owned lender Halkbank's bid to avoid criminal charges of money laundering, bank fraud and conspiracy for allegedly helping Iran evade economic sanctions in a case that has strained American relations with NATO ally Turkey.

The justices took up Halkbank's appeal of a lower court's decision rejecting the bank's contention that it was immune from U.S. prosecution under a 1976 law called the Foreign Sovereign Immunities Act, which limits the jurisdiction of American courts over lawsuits against foreign countries, because the business is majority-owned by Turkey's government. (Reporting by Nate Raymond in Boston; Editing by Will Dunham)