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Credit: Reuters/Umit Bektas By Pinar Aydinli ANKARA | Tue Sep 6, 2011 11:04am EDT ANKARA (Reuters) - Turkey is freezing defense trade with Israel and stepping up naval patrols in the eastern Mediterranean, highlighting a potentially destabilizing rift between the two major U.S. allies in the Middle East. Prime Minister Tayyip Erdogan's threat on Tuesday to send warships into waters where Israel's navy operates raises the risk of a naval confrontation between the two powers. "The eastern Mediterranean is not a strange place to us. Aksaz and Iskenderun -- these places have the power and opportunity to provide escorts," Erdogan told reporters in Ankara, referring to two Turkish naval bases. "Of course our ships will be seen much more frequently in those waters." Ties with Israel began to unravel after Erdogan voiced outrage at an Israeli offensive against the Gaza Strip, ruled by the Palestinian Islamist Hamas group, in late 2008 and early 2009. Before that Turkey and Israel had worked closely together on military cooperation and intelligence sharing, as both had sought reliable partners in a volatile neighborhood. Asked about Erdogan's remarks, an Israeli government official, speaking on condition of anonymity, said: "Israel does not want to see further deterioration in its relationship with Turkey." On Friday, Turkey announced it was expelling Israel's ambassador and other senior diplomats, downgrading relations after the release of a U.N. report on the killing of nine Turks during an Israeli commando raid on an aid flotilla that aimed to break Israel's naval blockade of Gaza last year. Israel's refusal to apologize for the deaths has angered Turkey, a NATO member with the bloc's second biggest military. And Turkey has also taken issue with the U.N. panel's conclusion that Israel's blockade is a legitimate measure to stop weapons reaching Hamas militants in Gaza, an impoverished, densely populated enclave of two million people. Erdogan said Turkey was preparing more sanctions against Israel, and specifically said defense industry ties would be frozen. "Trade ties, military ties, regarding defense industry ties, we are completely suspending them. This process will be followed by different measures," Erdogan said. An official at Erdogan's office 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. Economy Minister Zafer Caglayan said on Monday Turkey would do nothing "for now" to change its economic ties with Israel. According to the Stockholm International Peace Research Institute, which monitors arms sales worldwide, Israel delivered 170 rebuilt Turkish M-60A1 tanks to Turkey in a $688 million deal between 2005 and 2010. It also sold 10 Heron drones to Turkey in 2010 for $183 million. CYPRUS GAS DEALS Israel has expanded patrols in the eastern Mediterranean to enforce the Gaza blockade it says is needed to prevent arm smuggling to Hamas and deter any Lebanese Hezbollah militant attack on gas platforms. Turkish media reported that Erdogan held a meeting with Turkey's chief military commander, General Necdet Ozel, on Tuesday to discuss developments with Israel. Some Turkish and Israeli commentators have suggested Turkey might use the feud with Israel to build up naval patrols in seas between the Jewish state 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 recognized 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." Israeli Defense Minister Ehud Barak, in remarks broadcast before Erdogan's announcement on Tuesday, urged the two states to act with calm. "Israel and Turkey are the two strongest and in many respects the most important countries in the Mideast. "We have our differences, but in differences too it is important that both sides act using their heads and not their gut -- that will be best for us all and best for regional stability and restoring things," said Barak. Erdogan will visit Egypt on September 12-14 to discuss political coordination and economic ties, an Egyptian government official said on Tuesday. Some media reports had suggested Erdogan would travel from Egypt to Gaza, but the Egyptian official said he did not expect such a trip to take place. Erdogan will also attend the U.N. General Assembly in New York later this month where he is likely to give strong backing to Palestinian efforts to win U.N. recognition for a state they aim to create in Gaza and the Israeli-occupied West Bank. (Reporting by Pinar Aydinli and Ibon Villelabeitia in Ankara, Ece Toksabay in Istanbul, Jeffrey Heller, Allyn Fisher-Ilan and Maayan Lubell in Jerusalem, Edmund Blair in Cairo; Writing by Simon Cameron-Moore and Ibon Villelabeitia; Editing by Mark Heinrich) World Turkey Israel Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (2) gemini51 wrote: Erdogan is a loose cannon and grandstanding to the Arab world as he hopes to replace secular democracy in Turkey with theocracy – something he can’t do while having positive relations with Israel. It is time to reconsider Turkey’s membership in NATO, as he becomes increasingly more belligerent. He has freely bombed in Iraq. He has jailed more dissidents under the guise of Terrorists than any other government in the world, save China. He will gladly start a war to secure his desired position as leader of the Islamist governments of the Middle EAst. He may be the most dangerous terrorist out there. Sep 06, 2011 8:05am EDT -- Report as abuse ChrisUK wrote: @gemini51. You seem to have no legal or political understanding of happens in the Middle East. The UN Report made two distinct (separate) findings : (1) the killing of 9 Turks was the result of excessive and unnecessary force, and (2) the Gaza blockade is legal, however, it emphasized the two were distinct meaning the fact that the blockade is legal did not mean that Israel could kill whoever it wanted. So, Turkey is correct and absolutely justified in defending its citizens and protecting its interests. And, also, I am from the UK. Turkey is far from a theocracy. Does the CDU (Christian Democrats) in Germany make Germany a theocracy? No. There is a pub next to every mosque in Turkey — your comments are ignorant. With regards to NATO, Turkey is one of biggest troop providers to the effort in Afghanistan and I doubt there would be a unanimous decision by members of NATO to expel a country with which they have huge trade and military relations. In sum, Israel killed 9 Turkish citizens including a Turkish-American, what do you expect from Turkey? It is not grandstanding to defend your citizen’s rights. It is, however, Breivikesque to take your position in light of clear and convincing evidence that Israel murdered 9 people using “excessive force.” Sep 06, 2011 8:28am EDT -- Report as abuse See All Comments » Add Your Comment Social Stream (What's this?) 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