The collapse in diplomatic relations between Israel and Turkey means the Jewish state is likely to be barred from participating in a North Atlantic Treaty Alliance summit in May.
Israel could in theory take part in the Chicago summit next month in its capacity as a member of the Mediterranean Dialogue, a NATO outreach group whose other members include Egypt, Morocco, Mauritania, and Algeria.
But Turkey, which is a full member of the international alliance, is blocking Israel's presence because the government has refused to offer an official apology for the events on the Gaza flotilla nearly two years ago.
Nine Turkish anti-Israel activists were killed in the clash. Relations between Israel and Turkey, which had been stronger than Israel's ties with most in the region, have since deteriorated. In September, Turkey expelled the Israeli ambassador and formally downgraded diplomatic ties.
A Turkish official said the country would not give its consent to Israel being part of the summit.
"NATO is an alliance and even though Israel is not a member its attendance means positive dialogue with NATO and all its members," the official told Reuters. "Without sorting this issue out we deem it not appropriate for Israel to be around," the official said.
Turkish Foreign Minister Ahmet Davutoglu added: "There will be no Israeli presence at the NATO meeting unless they issue a formal apology and pay compensation".
Victoria Nuland, a spokeswoman for the US State Department, said: "Israel is one of NATO's partners in the Mediterranean Dialogue. Those discussions are continuing as we head towards the May summit in Chicago."