ANKARA (Reuters) - Turkish Prime Minister Tayyip Erdogan described offshore gas drilling by estranged ally Israel and Cyprus as "madness" on Wednesday, raising the stakes in a confrontation over potentially huge deposits in the eastern Mediterranean.
The quarrel over gas has escalated in recent weeks, just as relations between Turkey and Israel abruptly broke down over Israel's refusal to apologize for a deadly raid on a Turkish flotilla last year.
Israel and the Greek-speaking government of Cyprus are exploring for gas in the eastern Mediterranean, and Israel has laid claim to a massive deepwater gas field discovered in 2009.
Turkey, increasingly assertive in the region under Erdogan, disputes Israeli and Cypriot offshore territorial claims and says Cyprus should not exploit resources until it resolves a stand-off with its breakaway Turkish-speaking north.
Long one of Israel's few friends in the Middle East, Turkey downgraded diplomatic and trade ties with the Jewish state this month after Israel refused to apologize for killing nine Turks in a 2010 raid on a Turkish flotilla bound for the Gaza Strip.
"The Greek Cypriot administration and Israel are engaging in oil exploration madness in the Mediterranean," Turkish state news agency Anatolian quoted Erdogan as telling Turkish journalists in New York ahead of the U.N. General Assembly meeting.
"Actually, the Greek Cypriot administration's drilling activity is nothing but sabotage of the negotiation process between Turkish Cypriots and Greek Cypriots," he added.
The drilling controversy has added a new and potentially explosive element to a dispute over Cyprus which has defied mediation for decades.
The island was split by a Turkish invasion in 1974 after a brief Greek inspired coup. Turkey is the only country to recognize a breakaway Turkish Cypriot state in the north, where it maintains a military presence.
Turkey has said it would carry out its own energy surveys with the breakaway Turkish Cypriot state -- under escort by its war ships if necessary -- if Cyprus pressed ahead with drilling.
Erdogan again emphasized Turkish military prowess on Wednesday: "Our assault boats and frigates are already in the region," Anatolian quoted him as saying.
The United Nations is trying to unite Cyprus as a federation and wants talks to conclude by mid 2012. The European Commission has called for Cyprus and Turkey to show restraint in the gas row and work toward a settlement on the island.
Turkey's new tension with Israel makes the issue even more explosive at a time when the Arab Spring revolts are reshaping the balance of power in the region. Erdogan said last week that Turkish warships could be sent to the eastern Mediterranean at any time and Israel could not do whatever it wants there.
Texas-based Noble Energy which is carrying out the drilling operations for Cyprus, has been conducting offshore drills in the eastern Mediterranean for Israel since 1998.
Cyprus has said it will block negotiations Turkey began in 2005 to join the European Union if Ankara continues to oppose its gas exploration. Turkey has said it will freeze relations with the EU Presidency if Cyprus is given the rotating role next July before a settlement over the island is reached.
(Writing by Jonathon Burch and Ece Toksabay)