Erdogan in Somalia
Turkey's Prime Minister Recep Tayyip Erdogan (top) and his wife Emine Erdogan visit a camp for displaced people in Mogadishu August 19, 2011. REUTERS

After dramatically downgrading its relations with Israel on Friday, Turkey's Prime Minister Recep Tayyip Erdogan said his country is totally suspending all trade and military ties with Israel, as relations between the countries continue to sour.

Trade ties, military ties, regarding defense industry ties, we are completely suspending them, Erdogan said in Ankara Tuesday. This process will be followed by different measures.

Erdogan announced the freeze Tuesday, a day after Turkey ordered all senior Israeli diplomats to leave the country by Wednesday. Israel refuses to apologize for an armed raid on a Gaza-bound aid flotilla that killed eight Turkish citizens and a Turkish-American.

Last week, a United Nations-mandated inquiry into the deadly Israeli attack on the flotilla found that Israel had used excessive and unreasonable force to stop the flotilla approaching Gaza, but that it was justified in maintaining a naval blockade on the Palestinian enclave.

Announcing the new measures, Turkish Foreign Minister Ahmet Davutoglu said that Israel ambassador, Gabby Levy, and other senior Israeli diplomats would have to leave their posts by Wednesday; Turkey also downgraded its representation in Israel to the junior level of second secretary.

The time has come for Israel to pay for its stance that sees it above international laws and disregards human conscience, Davutoglu said. The first and foremost result is that Israel is going to be devoid of Turkey's friendship ... as long as the Israeli government does not take the necessary steps, there will be no turning back.

Israel's official said the Palmer Commission report, presented to U.N. Secretary General Ban Ki-moon on Friday, again expressed its regret for the loss of life, but will not apologize for actions of self-defense taken by its soldiers. The official said that Israel understood the importance of the historic relations between the Jewish and Turkish people. In light of that, Israel made many efforts in recent months to solve the conflict between the countries, but these did not succeed.

Turkey had demanded a formal apology from Israel and compensation for the families of the victims as a condition of improving and continuing relations. A compromise broke down, however, when it was rejected by the Right in Benjamin Netanyahu's Israeli government.

There is a deep sense of frustration within the Turkish foreign policy establishment that despite the efforts to mend the relationship and despite coming very close to agreeing to a text, the situation became untenable, said Sinan Ulgen, a former Turkish diplomat who is now an analyst for the Carnegie Endowment for International Peace think-tank.

The publication of the U.N. report really established a deadline. Its publication had already been postponed twice, and the Israelis then asked for another six months delay, which Turkey would not accept, Ulgen added.

Erdogan hinted on Tuesday that he might make a visit to Gaza, but would finalize plans after speaking to Egyptian officials. He is planning to visit Egypt later this month.