Prime Minister Benjamin Netanyahu has reportedly delayed approving the outline of a reconciliation agreement with Turkey for over a week because he is concerned that acceding to a $20 million compensation package will provoke the ire of right-wing political rivals.

According to reports in Hebrew media Thursday, 10 days ago a Turkish-Israeli negotiation team presented Netanyahu with a draft agreement aimed at resolving the diplomatic tensions between the countries. The agreement came with the positive recommendation of National Security Adviser Yossi Cohen, but the prime minister balked because of the sum that Turkey demanded in compensation for the deaths of nine of its citizens during the May 2010 ill-fated raid on the Mavi Marmara ferry.

In particular Netanyahu was concerned about criticism of the $20 million claim because he refused to pay out half that amount three years ago as part of an initial Turkish compensation plan, Army Radio reported.

Meanwhile, as Netanyahu mulled over the draft agreement, Turkish Prime Minister Recep Tayyip Erdogan upped the stakes on Tuesday by stipulating that Israel also lift the blockade on the Gaza Strip before he would agree to a détente.

Turkish Prime Minister Recep Tayyip Erdogan speaks during a press conference with his Spanish counterpart in Ankara on Tuesday, February 11, 2014 (photo credit: AFP/Adem Altan)

Turkish Prime Minister Recep Tayyip Erdogan speaks during a press conference with his Spanish counterpart in Ankara on Tuesday, February 11, 2014 (photo credit: AFP/Adem Altan)

On Wednesday Israeli officials rejected the new Turkish demand.

The Mavi Marmara incident triggered an international outcry and exacerbated already strained relations between Turkey and Israel into a full-blown diplomatic crisis, with Ankara expelling the Israeli ambassador and demanding a formal apology and compensation.

Talks on compensation eventually began in March 2013 after Netanyahu extended a formal apology to Erdogan in a breakthrough telephone call brokered by US President Barack Obama during a landmark visit to Israel.

“I am in favor of an agreement with Turkey, but (the current impasse) is Erdogan’s fault,” Strategic Affairs Minister Yuval Steinitz told Israel Radio. “I don’t understand Erdogan’s behavior.”

A spokesman for Netanyahu refused to comment on the matter, but press reports said he rejected the idea out of hand.

“Erdogan mentions the Gaza issue every so often, but it was never a formal part of the talks,” an Israeli official close to the negotiations told AFP.

“It is being dealt with in a separate channel, not as part of the diplomatic negotiations (on compensation).”

Turkish foreign ministry undersecretary Feridun Sinirlioglu was in Israel earlier this month to discuss the terms of an agreement, which would help normalize relations between Jerusalem and its once closest Muslim ally. Under the deal, Turkey would reportedly legislate to prevent lawsuits against Israel over the Mavi Marmara affair, and drop its objections to an upgrading of Israel’s relationship with NATO.

Foreign Minister Ahmet Davutoglu said on Sunday there had been “momentum” in talks toward bridging the gaps.

“It would not be correct to provide a timeframe on such (delicate) issues but I can say that serious progress has been made in recent meetings,” Davutoglu told Turkish television.

“A historic step was taken with the apology… Now a second step will be taken with the compensation,” he said. “We are going through a period where the relations are the closest to normalization after Mavi Marmara.”

Passengers on the deck of the Mavi Marmara on May 31, 2010 (Photo credit: IDF Spokesperson's Office/ Flash 90)

Passengers on the deck of the Mavi Marmara on May 31, 2010 (photo credit: IDF Spokesperson’s Office/ Flash 90)

Israeli media reports have said the compensation talks were revived in December when Israeli negotiators traveled to Istanbul and Turkey lowered its demands, which was neither confirmed nor denied by the Turkish side.

Davutoglu refused to disclose the amount of compensation being sought but hinted at “some positive developments.” He said he was in constant touch with Erdogan to discuss future steps to be taken after a deal including the appointment of an ambassador to Israel.

Turkey’s interest in reconciliation is also thought to be connected to its desire to purchase Israeli natural gas.

AFP contributed to this report.