UPDATE 1-Pompeo warns allies Huawei presence complicates partnership with U.S.

Secretary of State Mike Pompeo warned U.S. allies on Monday against deploying equipment from Chinese telecoms gear manufacturer Huawei on their soil, saying it would make it more difficult for Washington to "partner alongside them". "We want to make sure we identify (to) them the opportunities and the risks of using that equipment," Pompeo told reporters during a visit to the Hungarian capital, Budapest.

Hungary is the first stop in Pompeo's trip to central Europe that also includes Slovakia and Poland, part of an effort to make up for a lack of U.S. engagement in the region that opened the door to more Chinese and Russian influence, administration officials say. Washington is concerned about China's growing presence, in particular the expansion of Huawei Technologies, the world's biggest maker of telecoms equipment, in Hungary and Poland.

The United States and its Western allies believe Huawei's gear could be used for espionage, and see its expansion into central Europe as a way to gain a foothold in the EU market. Huawei denies engaging in intelligence work for any government. It says its technologies serve 70 percent of Hungarians and that it cooperates with most telecoms providers in Hungary, including state-owned enterprises.

Pompeo's tour includes a conference on the Middle East, hosted by Poland, where Washington hopes to build a coalition against Iran. He is also expected to voice concerns about energy ties with Moscow, and urge Hungary not to support the TurkStream pipeline, part of the Kremlin's plans to bypass Ukraine, the main transit route for Russian gas to Europe.

Hungary gets most of its gas from Russia and its main domestic source of electricity is the Paks nuclear power plant where Russia's Rosatom is involved in a 12.5 billion-euro ($14 billion) expansion. It is also one of the EU states that benefit most from Chinese investment. (Editing by Justyna Pawlak, Robin Pomeroy and Peter Graff)