Turkish Prime Minister Tayyip Erdogan said on Tuesday that Turkey was "totally suspending" defense ties with Israel, after downgrading diplomatic relations with the country.

While it was initially reported that Erdogan had also suspended all trade ties between the two nations, this was later clarified to refer to defense-related trade only.

"Trade ties, military ties, defense industry ties - we are completely suspending them. This process will be followed by different measures," Erdogan told reporters in Ankara.

But an official at Erdogan's office later told Reuters the prime minister was referring to military and defense trade ties only, not overall trade, which last year reached a total bilateral volume of $3.5 billion.

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Erdogan also said that Turkey would implement further sanctions against Israel and said that "our ships will be seen more frequently in [the Eastern Mediterranean]."

Some Turkish and Israeli commentators have suggested Turkey might use the feud with Israel to build up naval patrols in seas between the Israel and the divided island of Cyprus.

Turkey has bitterly complained about recent Cypriot-Israeli energy deals and the presence of Turkish ships would have a menacing effect.

Turkey and Cyprus have been at odds for decades over the ethnically split island, whose internationally recognized Greek Cypriot government is an EU member. Turkish Cypriots live in a breakaway state in northern Cyprus only recognised by Turkey.

Asked about exploratory drilling for natural gas by Greek Cypriots, Egemen Bagis, Turkey's European Union minister, told Turkish media last week: "It is for this (reason) that countries have warships. It is for this (reason) that we have equipment and we train our navies."

Erdogan's announcement Tuesday came as diplomatic relations between Turkey and Israel were severely strained following the release of the Palmer Commission report on the raid of the Mavi Marmara and Israel's refusal to answer Ankara's insistence that it issue an apology for the incident.

Erdogan also told reporters that he may visit Gaza and would decide whether to do so after talks with Egypt. Erdogan is planning to visit Cairo later this month.

A senior Israeli official on Sunday warned that it would be a diplomatic mistake for Erdogan to visit the Gaza Strip.

Channel 2 quoted the official as saying Erdogan would damage Turkey's relations with the United States by visiting Gaza. He added that the move would also weaken Palestinian Authority President Mahmoud Abbas, presumably because a trip to Hamas-controlled Gaza would challenge him as the legitimate representative of the Palestinians.

The Qatar News Agency quoted Turkish Deputy Premier Bulent Arinc as saying in a statement on Sunday that Erdogan was scheduled to meet with the head of Egypt's ruling military council, Field Marshal Mohamed Hussein Tantawi and other leading Egyptian politicians and intellectuals during the visit.

Herb Keinon contributed to this report.

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