The brewing diplomatic crisis came as Israel unveiled new rules to allow more goods into the besieged Gaza Strip, a carefully-timed move that Israel will hope shields it from US pressure to further ease its much-criticised blockade.
But as Israeli Prime Minister Benjamin Netanyahu prepares to meet President Barack Obama in Washington today, it was unclear if Israel had gone far enough to allow reconstruction in the Gaza Strip, critical to regenerating its shattered economy and easing humanitarian pressures.
A loud critic of Israel's policy in Gaza, Turkey ratcheted up the pressure on its erstwhile ally yesterday, threatening for the first time to sever ties with Israel if Mr Netanyahu's government does not apologise for the flotilla assault that left nine Turkish nationals dead. "Israelis have three options," Ahmet Davutoglu, Turkey's foreign minister, said. "They will either apologise or acknowledge an international, impartial inquiry and its conclusion. Otherwise, our diplomatic ties will be cut off."
The comments by Mr Davutoglu mark the most serious escalation in the crisis yet. Turkey, which has previously threatened to review ties, has withdrawn its ambassador, cancelled military exercises and prevented Israeli military jets from crossing its airspace.
Israel, which has rejected an international inquiry in favour of an internal one, has refused to apologise. "Israel cannot apologise because its soldiers had to defend themselves from being lynched by a crowd," Mr Netanyahu said on Friday.
In May, Israel launched an assault on a Turkish-led convoy that was trying to breach Israel's sea blockade of Gaza. The raid on the Mavi Marmara ship, in international waters, quickly turned into a bloodbath. Israel has maintained that it was acting in self-defence after its soldiers came under attack after landing on the ship. Activists countered that they acted in self-defence after Israeli commandoes fired at them with live ammunition.
The raid refocused worldwide attention on Israel's Gaza blockade, a policy that had attracted derision for the arbitrary decision-making that allowed the import of cinnamon, but not of coriander. Israel yesterday attempted to defuse some of the criticism it has drawn in recent weeks by unveiling a blacklist of goods not allowed into Gaza.
The list marks a significant step forward from an earlier "white list" that detailed only those items allowed in.
Israel's three-year blockade of Gaza has decimated the region's economy, condemning hundreds of thousands to live below the poverty line, and has prevented Palestinians from rebuilding their homes after Israel's devastating 2008-2009 military offensive.
Under the new measures, Gaza's residents will remain largely confined, while Israel will drop its ban on consumer goods such as food, toys and electrical items, and allow previously banned materials such as cement for use in construction projects coordinated with international agencies. The Israeli move received tentative approval from the international community.
"These changes are significant and, once implemented, should have a dramatic influence on the daily lives of the people of Gaza and on the private sector," the Middle East envoy, Tony Blair, a key negotiator in the new policy, said.
"Thousands of items that have not been available through legitimate channels for the last three years should now enter as a matter of course."
But aid agencies said that the new list merely legalised items, such as chocolate and tomato ketchup, already available via the smuggling tunnels from Egypt, albeit at a cost. They also voiced scepticism that the easing would allow Palestinians to rebuild their homes, noting that there would still be tight controls on the imports of cement, which Israel fears will be used to build bunkers.
"Can you imagine how many years it would take to negotiate [the passage of] the tens of thousands of truckloads needed to rebuild Gaza?" asked Sari Bashi, executive director of the Israeli charity Gisha, pointing to previous cases where it has taken months for a very small supply of cement to get through for United Nations projects.
There is also little prospect that Israel will allow Gaza to export goods on a large scale – critical if the devastated economy is to be revived.
Sami Abu Zuhri, a Hamas spokesman, described Israel's new policy as "worthless", adding: "The problem is not to approve new merchandise but to lift the blockade."
Israel has defended its blockade on the grounds that it was weakening Hamas, which seized control of Gaza in 2007. It has now conceded that the policy has failed.
Fuel bar for Iran aircraft
*New, unilateral sanctions against Iran that were signed into law by US President Barack Obama appear already to be pinching: Tehran claimed last night that its passenger aircraft were being refused refuelling in Britain, Germany and the United Arab Emirates.
"Since last week, our planes have been refused fuel at airports in Britain, Germany and UAE because of the sanctions imposed by America," Mehdi Aliyari, secretary of the Iranian Airlines Union, told Iranian media. He said the actions were affecting Iran Air, the flag carrier, and a private airline, Mahan Air.
Both the US and the European Union have imposed sanctions that go beyond those that were agreed at the United Nations Security Council last month. In the US, they include a provision that limits to a value of just $5m (£3.3m) the amount of refined petroleum products one company should sell to Iran in one year. If individual refuelling companies are shying from serving Iranian aircraft, it may be out of fear of being excluded later from the US market.
In Tehran, Mr Aliyari argued that "refusing to provide fuel to Iranian passenger planes by these countries is a violation of international conventions". Meanwhile, an Iranian, lawmaker, Heshmatollah Falahatpisheh, spoke of retaliation. "Iran will do the same to ships and planes of those countries that cause problems for us," Iran's Isna news agency cited him as saying.
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