Israel and Turkey have normalised relations, ending a six-year rift over the killing by Israeli troops of 10 Turkish activists on a Gaza-bound ship.
Turkish Prime Minister Binali Yildirim said a deal reached on Sunday would see Israel pay $20m (£15m) in compensation.
It will also allow Turkey to send aid to Gaza and carry out infrastructure projects in the Palestinian territory.
Israeli Prime Minister Benjamin Netanyahu said the agreement would help bring “stability” to the Middle East.
Turkey was once Israel’s closest ally in the region, and the two countries share many strategic interests. The Turkish and Israeli prime ministers announced the deal to restore diplomatic ties at simultaneous news conferences in Ankara and Rome.
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