Conditions are ripe for rebuilding the once strategic relationship between Israel and Turkey, diplomats on both sides believe. There is only one reason that it is not actually happening: President Reccep Tayyip Erdogan.

Israeli officials have had a series of meetings with their Turkish counterparts in recent months in which nearly all the terms of an agreement for compensating the families of nine Turkish activists killed in the Mavi Marmara ship incident in 2010 have been agreed on.

Despite the impending agreement and the changing situation in the region, which creates new opportunities for the old alliance, Israeli officials believe that it is Mr Erdogan who is holding back .

"In the last few years we have gone from being Turkey's closest regional allies on security and defence to zero co-operation," said a senior Israeli security official recently. For now, that does not seem to be about to change.

The Turkish president turned against Israel during Operation Cast Lead in Gaza in 2008-9, issuing increasingly critical statements, some of which bordered on antisemitic.

These conspiratorial hints, of forces controlling the international media and "credit markets", have become almost constant in his speeches, and some of his associates have specifically accused Jews of acting against Turkey. At the same time, Israeli diplomats maintain that there are also senior members of Mr Erdogan's Islamic-Conservative AK Party who are interested in rebuilding the relationship.

Mr Erdogan's foreign policy was once focused on building ties with all the main Muslim countries in the region, positioning Turkey as a dominant regional power. But when those countries did not fit in with his designs - particularly when Syria fell into civil war and Egyptian generals deposed the Muslim Brotherhood president he favoured - his plans went awry.

The nuclear agreement signed by the world powers and Iran two months ago has also been a setback for the Erdogan doctrine. As long as Iran was subject to sanctions and largely regarded as a pariah on the international scene, Mr Erdogan favoured improving ties with Tehran, as it put him in the dominant position in the relationship. Now, with Iran emerging from isolation and asserting itself in the region, it is being regarded by the Turkish government as more of a rival than an ally.

Turkey particularly fears the possibility of growing Iranian patronage of the Kurds in Syria and Iraq. Any factors that boost the chances of an independent Kurdish state and strengthen Turkish Kurds is a major concern.

Fear of Iran is a joint concern with Israel, which has quietly been rebuilding its once extensive relationship with the Kurds. The new Israeli engagement with the Kurds includes the acquisition of oil, produced by the Kurdish Regional Government in northern Iraq and piped to tankers through Turkey. Co-operation with Israel and other countries in the region - such as Azerbaijan - over oil and gas pipelines, has long been a possible basis for improving the ties between Ankara and Jerusalem, but Mr Erdogan's antipathy towards Israel and the deep-seated Turkish suspicion towards any country working with the Kurds remain the main obstacles.

From the 1960s onwards, Israel was engaged in wide-ranging efforts to aid the Kurds, including providing military training. At a number of junctures over the years, however, the Kurdish ties had to be balanced with the strategic relationship with Turkey.

At the height of the alliance, when Israeli fighter planes were regularly flying in Turkish airspace and the two countries collaborated closely in monitoring Syrian and Iranian territory, there was no question that nothing could be allowed to harm the ties. In recent years, however, that has changed and as long as Mr Erdogan continues to exert a major influence over his country's foreign policy, the choice is much simpler for Israel.