What does the Jerusalem announcement mean for Turkish-Israeli relations?

The leaders of Turkey and Israel have recently exchanged harsh words, re-fueling tensions after a period of normalised relations. 

The exchange followed US president Trump’s recognition of Jerusalem as the capital of Israel, a decision that has crossed a red line for Turkey. 

Turkish President Recep Tayyip Erdogan has accused Israel of being a terrorist state. "Palestine is an innocent victim... As for Israel, it is a terrorist state, yes, terrorist," Erdogan said in a speech in the central Anatolian city of Sivas on Sunday.

Israel’s Benjamin Netanyahu countered these words during a conference with French President Emmanuel Macron in Paris later on Sunday, where he criticized the president and Turkey’s policy on the Kurdish issue and its support for Hamas, the Palestinian resistance movement. 

Erdogan warned after the announcement last week that Jerusalem was a “red line for Muslims” and said that the move could lead to sever diplomatic ties with Israel. The warning comes just over a year after the two countries restored their respective ambassadors after a six-year standoff after the Marmara Mavi incident in May 2010.

That period also saw a slowdown in security and defence co-operation. Turkey blocked many of Israel’s NATO activities, according to diplomats who spoke with Israeli intelligence officials. 

In 2010, after the Mavi Marmara flotilla incident, Turkey had issued three demands, including an apology from Israel, compensation to the families of the victims, and a lifting of the blockade on the Gaza Strip. 

Restoring relations with Ankara was not only critical for security and defence co-operation, especially as the war in neighbouring Syria continues. It was also a linchpin in Israel’s strategy to unlock natural gas wealth in the eastern Mediterranean. Israel is looking for export markets, and exploring a pipeline to Turkey is one option, both for consumers there and as a connection to Europe.

Turkey and Israel had improved diplomatic ties in recent years after Israel issued an apology in March 2013 and paid compensation in June 2017 to the families of the victims of the Mavi Marmara incident. Israel also permitted the passage of humanitarian aid, partially relieving the blockade on the Gaza Strip.

However, Turkish authorities have continued to defend the Palestinian cause and have regularly criticised Israeli policy.

Continuation of trade and energy relations

Despite diplomatic and political differences, Turkey and Israel have continued to develop co-operation in the areas of trade, energy, defence and security—areas where the two countries have overlapping interests.

Turkish-Israeli diplomatic relations reached their lowest point in the period between 2010-2016. Turkey expelled Israel’s ambassador and froze military co-operation, and the two countries reduced intelligence sharing and canceled joint military exercises. However, economic ties continued to improve, despite a few small irregularities. 

Trade volume reached an all-time high in 2014, at $5.8 billion. Trade volume between the two countries is at $4.3 billion as of 2016.

A dip in trade volume can be seen between 2014 and 2015, which can be attributed to Turkey’s response to Israel’s “Operation Protective Edge” in Gaza, which drew international condemnation, during the summer of 2014. More than 2,100 Palestinians, mostly civilians, were killed. Six Israeli civilians and a Thai national also died.

The US factor

Trump’s Jerusalem announcement means that the US is openly and officially taking Israel’s side in the Israeli-Palestinian conflict, undermining the US’s position as a peace broker in the decades-long conflict. 

The decision could also undermine its role as a mediator, and shaper of Turkish-Israeli relations and politics. The Turkey-Israel partnership was supported and promoted by the US. 

The leaders of Turkey and Israel spoke for the first time in March 2013, after then-president Barack Obama visited Israel to convince Netanyahu to formally apologise for the Mavi Marmara flotilla raid. 

After the visit, Obama’s office issued a statement that underlined the importance of relations between the two countries. 

“The United States deeply values our close partnerships with both Turkey and Israel, and we attach great importance to the restoration of positive relations between them in order to advance regional peace and security,” it said. 

"I am hopeful that today's exchange between the two leaders will enable them to engage in deeper co-operation on this and a range of other challenges and opportunities."

However, diplomatic relations between the two countries have changed since then. 

Trump made his support for Israel clear during his campaign and cemented his support with his announcement of the embassy relocation. 

Turkey’s relations with the US have also been strained for several years due to the United States' support of the YPG in northern Syria, a group Turkey considers an offshoot of the PKK, which it considers to be a terrorist organisation, Turkey is also upset about Washington's refusal to extradite Fetullah Gulen, leader of the group that is responsible for the July 15 coup attempt in Turkey. Most recently, ties have taken another hit over the Hakan Atilla/Reza Zarrab case. 

Turkish-Israeli economic and energy co-operation continues to look promising, though the future of the US’s undeniable role as a mediator in their relations is less clear.