While there has been progress in talks to normalize relations with Turkey over the last few weeks, diplomatic officials stopped well short of confirming a Turkish newspaper report Wednesday that compensation talks between the countries over the Mavi Marmara incident were “nearly finalized.”

“There has been progress,” said one official informed of the talks, adding however that reports of an imminent deal were “premature.”

The daily Hurriyet quoted a Turkish diplomat Wednesday as saying that compensation talks for the Mavi Marmara have been “almost finalized” at a meeting last week in Istanbul.

The report said that the “vast majority of the text for compensation agreement is settled,” and that all that still had to be worked out was the amount.

The report also added that the sides agreed on the wording of the text, including a definition of compensation.

In July, Turkish Deputy Prime Minister Bulent Arinc said that the reason for the deadlock in compensation talks was not the money, but rather Israel’s unwillingness to admit that the compensation payment was the result of a wrongful act.

“Israel should accept that it’s paying this money as a result of its wrongful act. Nothing less than this will be accepted,” he said at the time.

Prime Minister Binyamin Netanyahu called Turkish Prime Minister Recep Tayyip Erdogan on March 22 and offered an apology for any operational errors that might have led to the death of nine Turkish activists on the Mavi Marmara ship trying to break the blockade of Gaza in 2010.

The phone call came at the urging of US President Barack Obama, who was visiting at the time, and took place from Ben-Gurion airport just before Obama left the country.

Israeli officials said that the formula for the apology was very carefully crafted, so as not to admit any Israeli legal culpability, and that Israel would not sign a compensation package admitting wrongful action.

According to Wednesday’s Hurriyet report, Jerusalem and Ankara will immediately announce the upgrading of relations, and an exchange of ambassadors, once the agreement is approved.

Ankara recalled its ambassador from Israel immediately after the incident, and expelled Israel’s envoy in 2011.

After the March phone call and apology, the expectation was for ambassadors to be dispatched by the summer.

An Israeli delegation, headed by National Security Adviser Yossi Cohen, and including Joseph Ciechanover, an envoy from the Prime Minister’s Office, and acting Foreign Ministry director-general Nissim Ben Sheetrit went to Istanbul last week and met with Feridun Sinirlioglu, undersecretary of the foreign minister. Sinirlioglu is a former Turkish ambassador to Israel.

The report of movement in the talks emerged amid a major corruption scandal roiling Turkey, creating friction between Washington and Ankara, with Erdogan hinting Saturday that the US ambassador could be expelled.

One source acknowledged there may be something to speculation that sudden progress in the Israel-Turkish talks may be linked to the current US-Turkish tension, with Ankara possibly looking for ways to lower the heat with Washington by normalizing ties with Israel, something seen as important in Washington.

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