Turkey and Israel to normalise relations

The two sides will make the announcement during final talks on June 26 after intensive diplomacy resulted in a compromise agreement on the partial lifting of Israel's blockade on the Gaza Strip, the Turkish Hurriyet daily said.

Previously tight relations between Israel and key NATO member Turkey were significantly downgraded after Israeli commandos staged a botched pre-dawn raid on the six-ship flotilla in May 2010 as it tried to run the blockade on Gaza.

Nine activists on board the Turkish-owned Mavi Marmara ferry were killed, with a tenth later dying of his wounds, sparking a bitter diplomatic crisis.

Two of Turkey's key conditions for normalisation - an apology and compensation - have largely been met, leaving its third demand - that Israel lift its blockade on the Hamas-run Gaza Strip - the main obstacle.

Under the terms of the deal, Israel will allow the completion of a much-needed hospital in Gaza, as well as the construction of a new power station and a sea water desalination plant for drinking water.

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Israel imposed its blockade on Gaza in June 2006 after Palestinian militants there snatched an Israeli soldier.

The restrictions were tightened a year later when Hamas took exclusive control of the enclave, but eased significantly following a wave of international outrage over the flotilla carnage.

Meanwhile, Turkey will send aid to Gaza but channel it via the Israeli port of Ashdod rather than sending it directly to the Palestinian territory, the paper said.

Ambassadors to return

The announcement would be made after talks between top Turkish foreign ministry official Feridun Sinirlioglu and Israel's pointman on Turkish relations, Joseph Ciechanover, it added.

It did not say where the talks would be held.

The two diplomats will meet again in July to formally sign the agreement, after which ambassadors would return to the respective embassies and full ties would be restored.

Israeli and Turkish negotiating teams are to meet in a European capital on June 26 for a decisive round of talks on the reconciliation agreement, Israel's Haaretz daily said.

Analysts have said Turkey may pursue a more conciliatory foreign policy following the departure of former Prime Minister Ahmet Davutoglu, who spearheaded an aggressive and interventionist strategy.

His successor, Binali Yildirim, last week said he wanted no permanent tensions with Black Sea and Mediterranean neighbours - after serious ruptures, not just with Israel but also with Egypt and Russia.