Turkey expelled Israel's ambassador and cut military ties on Friday over Israel's refusal to apologize for last year's deadly raid on a Gaza-bound aid flotilla, further straining a relationship that had been a cornerstone of regional stability.
The dramatic move came hours before the release of a U.N. report that called the Israeli raid that killed nine pro-Palestinian activists "excessive and unreasonable." The U.N. panel also blamed Turkey and flotilla organizers for contributing to the deaths.
The rupture between the Jewish state and what was once its most important Muslim ally raised concerns Egypt and Jordan might follow, increasing Israel's isolation in the region.
"If this ends with Turkey, it will be a miracle," said Alon Liel, a former Israeli ambassador to Turkey. "There is a lot of internal pressure in Egypt, and Turkey could use its clout in the Arab and Muslim world to pressure other nations to follow suit."
Turkey had made an Israeli apology a condition of improved diplomatic ties. But Israel insisted its forces acted in self defense and said there would be no apology. Israeli officials pointed out that the U.N. report does not demand an apology, recommending instead that Israel express regret and pay reparations.
"Israel once again expresses its regret over the loss of life, but will not apologize for its soldiers taking action to defend their lives," the government said in a statement. "As any other state, Israel has the right to defend its civilians and soldiers."
The 105-page report said Israel's naval blockade of Gaza was legally imposed "as a legitimate security measure" to prevent weapons smuggling, but added that the killing of eight Turkish activists and a Turkish-American was "unacceptable."
"The events of May 31, 2010, should never have taken place as they did and strenuous efforts should be made to prevent the occurrence of such incidents in the future," the report said.
The panel criticized Israel for failing to give "clear prior warning" that the vessels were to be boarded and failing to use "nonviolent options."
But the panel also found the flotilla "acted recklessly in attempting to breach the naval blockade." While the majority of flotilla participants had no violent intentions, it said "there exist serious questions about the conduct, true nature and objectives of the flotilla organizers."
As for the Turkish government, the panel said, it should have done more to warn flotilla participants of "the potential risks involved and dissuade them from their actions."
Turkish Foreign Minister Ahmet Davutoglu said that while the report noted "the violence committed by the Israeli soldiers," he criticized its characterization of Israel's naval blockade as a legitimate security measure in line with international law.
"To be frank, the report is null and void for us," Turkish President Abdullah Gul said.
In a statement, Israel said it accepted the report's conclusions, but "does not concur with the panel's characterization of Israel's decision to board the vessels in the manner it did as 'excessive and unreasonable.'"
Davutoglu said his government was downgrading diplomatic ties with Israel to the level of second secretary and that the ambassador and other high-level diplomats would leave the country by Wednesday.
He said all military agreements signed between the former allies were being suspended, and that Turkey would back court actions against Israel by flotilla victims' families and take steps to ensure "free navigation" in the eastern Mediterranean.
"The time has come for Israel to pay for its stance that sees it above international laws and disregard human conscience," Davutoglu said. "The first and foremost result is that Israel is going to be devoid of Turkey's friendship."
The Obama administration said it was reviewing the report.
"The U.S. has long-standing friendships with both Israel and Turkey," State Department spokeswoman Victoria Nuland said. "We regret that prior to the publication of the report they were unable to reach agreement on steps that might have helped overcome their differences.
"We hope they will continue to look for opportunities to improve their long-standing relationship, and we will encourage both to work towards that end."
The breakdown in Israeli-Turkish relations increases Israel's isolation at a sensitive time. Israel faces turmoil in ties with regional ally Egypt, where there have been growing calls to revoke the three-decade-old Egypt-Israel peace agreement following the ouster of longtime leader Hosni Mubarak. Last month, Egypt briefly threatened to withdraw its ambassador from Israel after a shooting in southern Israel left five Egyptian soldiers dead.
It also comes as Israel seeks to muster international support against an attempt by the Palestinians to have their state recognized at the U.N. later this month.
Turkey was once Israel's closest ally in the region. Ankara had mediated several rounds of indirect negotiations between Israel and Syria in 2008, but the talks made no significant headway and were suspended following the Israeli military offensive in Gaza the following year.
Ties have soured further in recent years and deteriorated sharply after the flotilla bloodshed on May 31, 2010. The Israeli ambassador's expulsion is the most significant downgrading in ties between the two countries.
Under Turkish-Israeli military agreements, Israel provided Turkey with drones which the country uses to gather intelligence on Kurdish rebels fighting Ankara for autonomy. Israel has also modernized Turkish tanks and warplanes while Israeli pilots used Turkey's airspace to train. The countries' militaries have also trained with each other in both countries, and were top defense trading partners, although no new defense contracts have been signed since 2008.
In Gaza, Hamas applauded the Turkish move.
"This is a natural response to the Israeli crime against the freedom flotilla" and to the continuation of the naval blockade, spokesman Sami Abu Zuhri said.
The Turkish-flagged ship Mavi Marmara was en route to Gaza in an attempt to bring international attention to Israel's blockade of the Palestinian territory.
After the violence triggered an international outcry, Israel eased restrictions on goods moving into Gaza overland, but left the naval blockade in place.
The activists charge the blockade constitutes collective punishment and is illegal. Israel asserts that it is necessary to prevent weapons from reaching militants who regularly bombard Israeli towns with rockets from Gaza.
The U.N. committee was composed of two international diplomats _ former leaders of New Zealand and Colombia _ as well as a representative from Israel and one from Turkey.
Friedman reported from Jerusalem. Edith M. Lederer at the United Nations, Aron Heller in Jerusalem and Bradley Klapper in Washington contributed to this report.