Israel has reportedly offered Turkey $20 million in compensation to the families of those killed and wounded in its 2010 raid on a Gaza-bound flotilla.

Citing unnamed Western diplomats briefed on the ongoing negotiations with Ankara, the Haaretz daily reported on Monday that Turkey had yet to respond to the Israeli offer.

Once-close relations between the two nations fell apart under the rule of the Islamist Justice and Development Party (AKP) in Ankara. With tensions already strained, in May 2010, Israeli commandos killed nine Turkish nationals when they came under attack during a pre-dawn raid to take control of the Mavi Marmara, a ship that was seeking to break Israel’s naval blockade on the Hamas-ruled Gaza Strip.

The incident provoked a major diplomatic crisis between the former regional allies, with Ankara demanding a formal apology, compensation for the families of the victims and an end to the blockade of Gaza.

Talks finally began in March 2013 after Israel extended a formal apology to Turkey to get relations back on track following top-level intervention by US President Barack Obama.

The talks stalled for several months but were revived in December when Israeli negotiators traveled to Istanbul and Turkey lowered its demands for compensation, Haaretz reported.

Western diplomats quoted by the paper said Ankara had demanded $30 million, but Israel was initially willing to give only $15 million.

Prime Minister Benjamin Netanyahu later decided to up Israel’s offer to $20 million, with an extra $3 million available “if necessary to secure an agreement,” the paper said.

The funds will not be paid directly to the families of the dead and wounded, but will be deposited in a humanitarian fund and distributed to them in accordance with defined criteria, it said.

Netanyahu’s office refused to comment on the report.