Turkish President Abdullah Gul has rejected claims that he refused to meet with his Israeli counterpart Shimon Peres in New York.
Ties have been strained since Israel attacked a Turkish aid flotilla trying to enter Gaza in May.
Gul insists a meeting was never discussed.
“As long as Israel fails to reflect on what happened and act on it, then it will not be possible for us to have such relations,” Gul said.
“Israel must asses the value of good relations with Turkey because we have been the only muslim country in the region to have such close ties with them.”
Turkey wants Israel to apologise for shooting dead nine of its nationals and compensate the victims’ families.
Israel says its commandos only retaliated with live fire after being attacked.
It also says Ankara should have done more to stop the flotilla from leaving Turkey.