In a new effort at reconciliation, Prime Minister Benjamin Netanyahu last week appointed David Meidan, the former Mossad operative who spearheaded the Shalit prisoner deal, as his special envoy to the Turkish government.
In what is seen as an encouraging move in Jerusalem, Turkey has accepted the move and Mr Meidan will be meeting senior officials in Ankara over the next few weeks in an attempt to reach a compromise between the two countries.
Turkey announced the downgrading of its diplomatic relations with Israel in August. This came following Israel's refusal to accept its demands for a full apology of the killing of nine Turkish activists during the take-over of the Mavi Marmara ferry in May 2010 and the publication of the UN Palmer Report that ruled that Israel's naval blockade of Gaza was lawful.
In recent weeks, however, Israel has identified a number of "encouraging" signals from Turkey, including the decision of Prime Minister Reccep Tayyep Erdogan to receive Israeli aid following the earthquake in the Van province.
Last week, two boats sailed from Turkey in an attempt to reach Gaza and were commandeered by the Israeli Navy off the Gaza coast on Friday. According to a senior Israeli defence source: "We saw no sign of Turkish assistance for these boats. On the contrary, from what we understand, they lied to the port authorities and said they were sailing to Rhodes."
Israel and Turkey are willing to seek better relations
In the past, the Turkish government has said it would send its own naval vessels to accompany ships sailing for Gaza, but the Israeli government noted last week that the Turkish authorities did not even release a statement regarding the latest flotilla.
Neither did Ankara condemn Israeli attacks on targets in the Gaza Strip during last week's escalation with Islamic Jihad. An Israeli diplomat said: "We should be cautious but it seems that Erdogan is toning down his rhetoric towards Israel."
Mr Meidan, who succeeded in pushing through the Shalit deal after other negotiators had failed for five years, is the former head of the Mossad department that deals with other intelligence agencies and has extensive contacts with the Turkish defence establishment. Turkey is now dealing with the breakdown of its relations with Syria's Assad regime and has recently allowed the Syrian opposition to operate from across the Turkish border.
Turkey has also reached a number of new defence agreements with the US administration regarding its border with Iraq. Defence analysts in both Israel and Turkey have expressed the view that neither country can afford to remain at loggerheads at such a crucial time and while Turkey is stepping into a regional power vacuum.
Mr Meidan's mission indicates that both sides are still willing to seek reconciliation, although one Israeli diplomat who was involved in the previous round of talks said: "We have yet to see a sign of compromise from Erdogan. That doesn't mean we should stop trying."