Turkey's foreign minister on Saturday said the country wants improved ties with Israel, but it must apologize and offer compensation for its deadly raid on a Gaza Strip-bound aid flotilla.

The U.S. and the European Union have called on Turkey and Israel to overcome tensions and renew close links to help with peace efforts in the Middle East.

"We have the intention of making peace with Israel," the state-run Anatolia news agency quoted Ahmet Davutoglu as saying during a meeting with a group of journalists in Istanbul. "We are for peace with all countries."

"Why should we want bad relations with a country with whom we are trying to broker peace," Davutoglu said in reference to Turkey's mediation between Israel and Syria in 2008, a role that won this NATO member international praise.

Israel and Turkey built strong military and economic ties over the past 15 years, and Turkey became Israel's closest ally in the Muslim world.

Relations between the two soured, however, with Turkey's Islamic-oriented government's increasingly vociferous criticism of Israel's treatment of Palestinians. They hit an all-time low in May, when Israeli naval commandos killed nine activists from Turkey on board a Gaza-bound ship that tried to breach Israel's naval blockade.

Turkey withdrew its ambassador from Tel Aviv and Turkish leaders denounced Israel repeatedly over the raid. Turkey has made an Israeli apology and compensation for the victims' families a condition for improved ties.

Israeli commandos said they opened fire in self-defense after meeting what they called unexpected resistance when they boarded the ferry carrying aid supplies to Gaza. Turkish Prime Minister Recep Tayyip Erdogan also wants Israel to end its blockade on the Gaza Strip. Israel and Egypt blockaded Gaza after the militant Islamic Hamas seized control there in 2007.