The steep slide in Israeli-Turkish ties continued unabated Tuesday with Turkish Prime Minister Recep Tayyip Erdogan announcing that Ankara was freezing defense trade with Israel and would step up navy patrols in the eastern Mediterranean.

Though Turkish Foreign Minister Ahmet Davutoglu announced these steps on Friday when the Palmer Commission’s report on the Mavi Marmara incident was released, the fact that Erdogan repeated them, kept up for the fifth consecutive day unprecedented tension between Jerusalem and Ankara.

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Nevertheless, officials in Jerusalem held out hope that a way could still be found to find a formula relating to the Marmara incident that would end the crisis. While Israel has said it was willing to pay compensation to the families of the nine people killed in the incident, and has expressed regret for the loss of life, it added that it will not apologize to the Turks, as they are demanding.

Nevertheless, one diplomatic official said Israel is trying to contain the issue, and the government – which for the most part has not responded to heated rhetoric coming from Ankara – is not interested in a “war of words” with Turkey. “We remain open to a formula that will put the relations back on track,” the official said.

The official said it was clear the original hope that the Palmer Report would help put the relations back on track have been dashed, and the publishing of the report has only exacerbated the situation.

Defense Minister Ehud Barak, during a tour in the North, said “Israel and Turkey are the two strongest and in many respects the most important countries in the Mideast. We have our differences, but in differences, too, it is important that both sides act using their heads and not their gut – that will be best for us all and best for regional stability and restoring things.”

Turkey has already expelled Israel’s ambassador and all diplomats at the embassy in Ankara above the second secretary level. On Monday, Israeli passengers traveling through Istanbul were singled out for particularly harsh security measures.

“The eastern Mediterranean is not a strange place to us. Aksaz and Iskenderun, these places have the power and opportunity to provide escorts,” Erdogan told reporters on Tuesday, referring to two Turkish naval bases.

“Of course our ships will be seen much more frequently in those waters.”

On condition of anonymity, a Turkish journalist told The Jerusalem Post that an official source in Ankara said Turkish naval ships may accompany a future IHH flotilla Gaza to prevent what the official described as an Israeli “atrocity.”

Regarding economic relations between the countries, Erdogan said, “Trade ties, military ties, regarding defense industry ties, we are completely suspending them. This process will be followed by different measures,” he said.

“Israel has always acted like a spoiled child in the face of all UN decisions that concern it. It assumes that it can continue to act like a spoiled child and will get away with it,” Erdogan said, according to the Turkish daily Today’s Zaman.

He said the raid on the Mavi Marmara, which the Palmer Commission justified – though saying Israel used unreasonable and excessive force – was “inhumane” and “an act of state terrorism and savagery.” He said the UN panel’s report “holds no value for us.”

“If the measures [we have] taken so far [against Israel] are part of a Plan B, then there will also be a Plan C. Different steps will be taken depending on the course of developments...

We are totally suspending our commercial, military and defense ties. They are being frozen entirely,” Today’s Zaman quoted him as saying, without elaborating.

The paper quoted officials in Erdogan’s office later in the day, however, as clarifying that commercial ties with Israel will not be affected.

They said Erdogan was only referring to defense trade between the two countries.

“Things are really bad,” a Turkish journalist with contacts in government told the Post. “It seems Ankara is determined to escalate the relationship, and from their perspective, they see Israel determined to escalate the relationship as well... because it’s not apologizing, not giving compensation [to victims’ families] and not bringing an end to the Gaza naval blockade.”

In 2010 the two countries did $3.5 billion worth of trade.

Erdogan also said he may visit Gaza during a planned visit to Egypt later this month, but would decide after consulting the Egyptian government.

He will also attend the UN General Assembly in New York later this month where he is expected to speak strongly in support of Palestinian efforts to win UN statehood recognition. Israeli officials said this would likely have occurred even without the current crisis.

Meanwhile, Kadima head Tzipi Livni, who was foreign minister during the first major crisis with Turkey over Operation Cast Lead in 2009, said in an interview with CNN Turk on Tuesday that “the time has come for our countries to talk about the future, and not only the past. We also have national honor and the time has come to talk about what can be done because Turkey needs these relations, and not only Israel.”

Livni said it was also time for the tone to become less emotional.

“Every day there are additional statements from Turkey, and when it becomes so emotional the leaders need to sit down together and discuss the interests of the sides, because in the end the interests of both Israel and Turkey are to get over the crisis.”

Livni blamed Hamas for the crisis, saying Israel sent its soldiers to defend its citizens against Hamas.

“Turkey wants peace in the region, but Hamas does not represent that and works against that. If Turkey wants to be a part of the peace camp, then that is not with Hamas.”

Oren Kessler and Reuters contributed to this report.

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