Israel and Turkey are close to normalizing full diplomatic ties, sources in the Prime Minister’s Office said Thursday night, following a high level secret meeting in Switzerland a day earlier to hammer out the reconciliation terms.Incoming Mossad head Yossi Cohen, and Joseph Ciechanover, who has served as Prime Minister Benjamin Netanyahu’s special envoy to Turkey for the past five years, met with Turkish Foreign Ministry director-general Feridun Sinirlioglu to draw up the terms of the agreement that would put an end to the 2010 Mavi Marmara incident that led to a tailspin in diplomatic ties between the two countries, the sources said. Sinirlioglu is a former ambassador to Israel.The agreement comes at a time of increased regional isolation for Turkey, which is in a bitter dispute with Moscow over the downing of one of Russia’s warplanes, is in conflict with most of its neighbors and is coming under international criticism for its troop involvement in Iraq and its trade in Islamic State’s oil.Thursday’s announcement came just three days after President Recep Tayyip Erdogan – known for his very anti-Israel statements and positions – made his first conciliatory statement toward the Jewish state in years, saying the region needs a normalization of Turkish-Israeli ties, and that this “has a lot to offer to us, to Israel, to Palestine and also to the region.”According to the Prime Minister’s Office, the two sides meeting in Switzerland came to the following understandings: • Israel would establish a compensation fund to pay the families of the nine Turks killed on the Mavi Marmara when it tried to break Israel’s blockade of the Gaza Strip.• All Turkish claims against Israel stemming from the raid will be dropped.• Turkey’s ambassador will return to Tel Aviv, and Israel’s envoy will return to Ankara.• Hamas terrorist Salah al-Arouri, believed to have masterminded the kidnapping and murder of the three Israeli teenagers in Gush Etzion who has been operating from Turkey, will not be allowed in the country, and his activities there will end.• Talks will begin shortly regarding the possibility of laying a gas pipeline to Turkey and the sale of Israel’s natural gas there. As a result of Ankara’s tension with Moscow, this issue is now much more pressing for Turkey, since it is highly dependent on Russian gas.The Prime Minister’s Office stressed that the understandings are awaiting final signatures from both sides.Cohen, serving as Netanyahu’s national security adviser, drew up a draft agreement – along with Ciechanover – with the Turks back in February 2014 that had similar elements to what was agreed on in Switzerland.That draft, however, was never signed.At the time there was agreement that the compensation fund for the Mavi Marmara would be $20 million. Israeli and Turkish officials met again in Rome in June of this year.Earlier this week, Erdogan, when he made his conciliatory comments, said there were still obstacles to mending ties with Israel.After the Mavi Marmara incident, Erdogan put three condition on a normalization of ties: an Israeli apology, compensation and a lifting of the blockade of Gaza.Netanyahu apologized in 2013 and the issue of compensation has apparently been resolved, but there was no word in Thursday’s statement from the Prime Minister’s Office regarding the issue of the Gaza blockade.Israeli officials have said Israel would not lift the blockade, which it sees as of cardinal importance to its security, to please Erdogan.Following Erdogan’s comments earlier this week, the Prime Minister’s Office put out a formal announcement of an Israel- Greece-Cyprus summit in Nicosia next month to talk about natural gas, security and regional issues. The timing of that announcement seemed designed not only to reassure the Greeks and the Cypriots that any improvement in ties with their historic rival Turkey would not come at their expense, but also to send a message to Turkey that – in the reconciliation negotiations – Israel has other regional options.