A draft agreement between Israel and Turkey over compensation for the families of the nine Turkish citizens killed three years ago on the Mavi Marmara ferry was prepared last week in talks in Ankara between representatives of the two nations.

According to sources in both countries, Israel has agreed to pay around $10 million (£6.4m) in addition to the apology it issued Turkey two months ago. In return, the Turkish parliament will pass legislation preventing the Marmara families from suing Israeli officers or officials in court.

It is not clear when the agreement will be finalised but Israeli and Turkish diplomats are optimistic that the talks are on track.

Meanwhile, the resumption of diplomatic relations between Israel and Turkey is proceeding very slowly.

A senior Israeli official said this week: “It was crucial to renew relations but it will take a long time for them to return to anything near what we used to have.”

There is no date so far for the arrival of new ambassadors in either capital, and Turkish Prime Minister Recep Tayyip Erdogan is still planning to visit Gaza at the end of the month, against Israel’s wishes, and despite a request from the US to postpone the visit.

US Secretary of State John Kerry floated the idea that Turkey should serve again as a broker between Israel and the Palestinians but, so far, Israeli leaders have been cool towards the idea on account of Ankara’s close relations with Hamas.

The only real progress seems to have been in quiet talks over extending the pipeline that takes Azerbaijani oil to the Turkish port of Ceyhan and then under the sea to Israel. But no agreement on the pipeline will be announced until the Marmara talks are concluded and a deal signed.

“We can’t assume for the time being that Turkey is an ally,” said a senior Israeli defence official this week.

“For now, they are still a potential rival, if not an enemy. As [long as] Erdogan is in charge there, there won’t be friendly relations.”

Israeli military chiefs are worried that some central figures in the defence establishment in Ankara, including highly placed members of the intelligence service, have close ties to the Iranian regime.

A report last week in the British media that Israel is seeking a base in Turkey for a potential strike on Iran was dismissed by Israeli officials as being “as far away from reality as possible”.