Israel, Turkey Set to End Six-Year Rift Today, Official Says

  • Talks on Turkish imports of Israeli gas to begin immediately
  • Trade ties flourished despite the diplomatic rupture

Israeli Prime Minister Benjamin Netanyahu will announce his country’s reconciliation with Turkey in Rome on Sunday, an Israeli official said, speaking on condition of anonymity to discuss confidential negotiations.

A deal would pave the way for multibillion-dollar natural gas contracts as Israel seeks to export fuel from its largest field and Turkey looks to reduce its reliance on Russian gas. Energy talks are to open immediately after reconciliation is announced, the official said.

Diplomatic ties ruptured six years ago after a deadly clash at sea between Israeli commandos and pro-Palestinian Turkish activists seeking to breach Israel’s naval blockade of the Gaza Strip.

Years of on-again, off-again rapprochement talks received new impetus after the Turkish military downed a Russian combat plane in November, provoking Russian economic sanctions.

Word of the impending deal moderated the decline in Israeli gas shares, and they were among the best performers as the TA-25 benchmark index dropped 3.2 percent after the U.K. voted to leave the European Union. Delek Group Ltd. fell 1.7 percent, Delek Drilling LP declined 1.4 percent, and Avner Oil Exploration LLP lost 1 percent at 2:39 p.m. in Tel Aviv. Turkish markets are closed on Sunday.

Under the reconciliation agreement, the official said, Israel will pay Turkey $20 million compensation for the deaths of 10 Turkish citizens in the naval raid on the Mavi Marmara ship, in which the commandos faced violent resistance from activists on board. Turkey has abandoned its demand that Israel lift its naval blockade of Gaza, which Israel says is meant to keep weapons from reaching militants, the official said. Turkey will build a hospital and residential projects in Gaza, he added.

A formal reconciliation deal will be signed in a week or two, Israel’s Ha’aretz newspaper reported. On Wednesday, the agreement will be brought for approval before Israel’s inner cabinet of ministers with security responsibilities, which is expected to approve it, the newspaper said.

Israel’s flourishing military trade with Turkey dried up during the estrangement and once-popular tourism to Turkey fell more than 80 percent since 2009, according to the Israeli Embassy in Ankara. Other business channels remained open, however, and bilateral trade reached a record $4.4 billion in 2011, according to official Turkish figures, and stayed near that level last year.

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