Prime Minister Recep Tayyip Erdogan made his announcement in Ankara in the wake of the May 22 apology Israel made for "operational mistakes that might have led to deaths" on the Gaza-bound ship Mavi Marmara in May 2010, Today's Zaman reported.
Israel also said it would compensate the families of the fallen, but would not lift the blockade as part of a peace initiative put together by U.S. President Barack Obama.
Talks between Turkey and Israel scheduled for this past Friday were delayed to April 22 after the families of those killed on the ship said they wouldn't drop criminal proceedings against Israeli commanders involved in the incident, Today's Zaman reported.
Erdogan has insisted that the end of the blockade is a precondition for re-establishing normal ties between Ankara and Jerusalem and said he would travel to Gaza to monitor the blockade's status.
Erdogan said he objected to what he called Israel's continuing attacks on Gaza and that he opposed categorizing the terrorist group Hamas as a terrorist organization.
He objected to Hamas being left out of an Israeli-Arab peace initiative led by the United States.
"This is what Israel wants," Erdogan said. "We have been saying from the beginning that a negotiating table where Hamas or al-Fatah is not represented cannot produce peace. It is out of the question for us to consider Hamas as a terrorist organization. For us, Hamas is what al-Fatah is."