Turkey says it is suspending military trade and cooperation with Israel and increasing naval surveillance in Mediterranean waters, in response to Israel's refusal to apologize for a deadly raid on a Turkish aid vessel last year.

Turkish Prime Minister Recep Tayyip Erdogan on Tuesday said Ankara's “trade, military and defense industry” relations with Israel will be suspended “completely.” His office later clarified that Mr. Erdogan was referring to a suspension of defense projects with Israeli companies, not overall trade, which Ankara says was worth $3.5 billion last year.

The Turkish prime minister also says Turkish warships will become more visible in the eastern Mediterranean, where Israel carried out the May 2010 raid on the Turkish vessel Mavi Marmara as it sailed toward the Gaza Strip with humanitarian aid for Palestinians. Israeli commandos stormed the vessel to enforce a Gaza blockade aimed at preventing weapons from reaching militants who control Gaza.

A confrontation on the vessel led to the killings of nine Turkish activists, including a Turkish-American, and the wounding of several Israeli soldiers. Turkey ordered the expulsion of Israel's ambassador last week, when Israel rejected an ultimatum to apologize for the raid. Ankara demanded an apology by the time a United Nations panel released a report on the Mavi Marmara incident. It released that report Friday.

Israel has expressed regret for the deaths of the Turks. An Israeli official said Tuesday Israel does not want to see a further deterioration in relations with Turkey.

Mr. Erdogan said Tuesday he may impose additional sanctions on Israel, but he did not elaborate. He also said he may visit Gaza to promote his campaign for an end to the Israeli naval blockade of the territory. Mr. Erdogan said his government is discussing such a visit with Egyptian officials. Egypt shares a small border with Gaza.

A U.N. panel that wrote the report said Israel used “excessive and unreasonable” force by sending armed commandos to storm the Mavi Marmara. But the report also said Israel's enforcement of the naval blockade was a “legitimate” security measure against the Mavi Marmara and other vessels in a Gaza-bound flotilla. The U.N. panel also accused the flotilla organizers of acting “recklessly” by trying to challenge the blockade.

Israel accepted the report with some reservations, while Turkey rejected its key findings. The Mavi Marmara incident has accelerated a worsening of relations between the two former allies, whose militaries had conducted joint exercises for years.