Israel has little prospect of restoring its once close ties for Turkey anytime in the near future and will likely find itself under pressure from Ankara in Egypt and in the Mediterranean, Alon Liel former Israeli envoy to Turkey said on Tuesday.

His remarks came as Turkish Prime Minister Recep Tayyip Erdogan raised bilateral tensions another notch on Tuesday by saying Turkey was "totally suspending" defense industry ties and reiterating a vow to step up the country’s naval presence in the eastern Mediterranean. “This process will be followed by different measures," Erdogan told reporters in Ankara.

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Increasingly strained ties between the two former allies came close to the breaking point over the weekend after Ankara responded angrily to a leaked United Nations report of the 2010 Israeli commando raid on the Turkish ship Mavi Marmara, which left nine dead. Foreign Minister Ahmet Davutoglu downgraded relations and said Turkey would mount a diplomatic campaign against the Jewish state over its Gaza blockade.

“It is a dramatic move in the bilateral [arena],” Liel told reporters in Jerusalem. “It’s not something that can be reversed in the near future, even with an apology … The regional circumstances will have to change.”

Turkey has been seeking an official apology from Israel for the Mavi Marmara deaths as well as compensation for the victims’ families and an end to the blockade. Last month, Jerusalem decided not to apologize, a move Liel said reflected the majority view in the cabinet that Erdogan isn’t serious about restoring the former friendship between the two countries.

The depth of the tensions has become apparent in the last few days, with a group of Israeli tourists complaining they were mistreated at Istanbul airport on Monday – segregated and stripped searched for 90 minutes. A group of Turkish tourists arriving from Israel made similar complaints about their treatment in Tel Aviv’s Ben-Gurion Airport.

Turkey and Israel were allies for much of the last two decades. Turkey benefited from access to Israeli military technology and from spending by tourists flocking to its Mediterranean beaches. Israel gained a strategic ally in a region where it has few friends as well as an important export market. Erdogan’s announcement on Tuesday strikes at the heart of those trade and defense ties.

Even as the diplomatic discourse between the two countries grew rougher, bilateral trade expanded and Israel even agreed last May to go through with the sale of a sensitive spy camera to Turkey, despite fears that the technology could find its way to hostile, third party elements.

In the first seven months of the year, two-way trade between Israel and Turkey climbed 27% to $2.7 billion, with Israeli exports to Turkey leading the increase.

Bank of Israel Governor Stanley Fischer warned on Monday that the damage to Israel from the loss of trade would be “serious.” Turkey’s $700 billion economy is the largest in the region and it has emerged as a conduit for trade to Europe, Asia and the Middle East.

The unraveling of the once close ties comes at a turbulent time, as the Arab Spring has brought down many long-term Middle Eastern leaders and threatens others. For Turkey, it upsets efforts to build a network of trade and diplomatic relations across the region. It deprives Israel of dependable leaders and threatens the rise of hostile Islamic regimes or political chaos.

Liel said Turkey might well take advantage of those upheavals to pressure Israel. Erdogan is scheduled to visit Egypt next week in talks to form a strategic alliance and gain Cairo’s permission to enter the Gaza Strip. A Gaza visit would certainly anger Israel, which has sought to isolate Hamas.

Liel speculated that Erdogan might use Turkey’s growing economic clout to provide more economic and military aid to Egypt as a counter-balance to American influence. The US provides some $2 billion annually to Egypt, whose economy is in the doldrums due to the unrest following President Husni Mubarak's unseating last February.

“I wouldn’t be surprised if there will be Turkish economic aid, maybe military aid, offered to Egypt,” Liel said. He added that with Syrian leader Bashar Al-Assad’s regime threatened by protests, “Turkey needs a regional ally and will invest a lot of money in Egypt to get it.”

In the eastern Mediterranean waters, Turkey is unlikely to risk a confrontation with Israel over the Gaza blockade, Liel said. But he predicted that there is potential for friction if Israel goes ahead with plans to deliver natural gas to Cyprus, a country with whom Turkey is at odds. The gas would be converted to liquid form for re-export to Europe.

Turkey was the first Muslim country to recognize the Jewish state in 1949, but Liel recalled that relations had gone through rocky periods over the following decades, mainly when Ankara was unhappy over how Israel was progressing on the peace process with the Palestinians.

Israel’s diplomatic status was downgraded in 1981, in much the same way it was downgraded last week to the level of second secretary, and wasn’t restored to ambassadorial level for another decade. The root of current tensions lies in the failure of renewing peace talks under Prime Minister Binyamin Netanyahu’s government, said Liel.

Analysts generally agree that the initiative to revive the relationship lies with Turkey, but disagree on whether this is possible.

Fadi Hakura, Turkey expert at London’s Chatham House, told The Media Line that Erdogan’s government is pragmatic and hasn’t undertaken any “massive shift” in foreign policy since coming to power.

“Even prior to the Arab reawakening much of the media portrayed [Turkey’s] relations with Iran as anti-Western,” he said. “But if you look closely - apart from symbolic acts, such as opposing Iran sanctions – that when push came to shove Turkey didn’t oppose American plans to erect a missile defense shelf under the NATO umbrella. Crucially, Turkey came on board.”

But Barry Rubin, director of Israel’s Center for Global Research for International Affairs and editor of the Turkish Studies journal, said Ankara’s policy was guided by the Islamic faith and politics of Erdogan and his Justice and Development Party (AKP). He branded Israel and Turkey’s “special relationship” as "over".

“We saw that every time Israel tries to negotiate, they [Turkey] kept upping the ante,” Rubin told The Media Line. “Even Israeli officials who were ready to consider an apology came to the conclusion that the Turks weren’t negotiating in good faith.”

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