Istanbul (CNN) -- Turkey has decided to expel Israel's ambassador and other senior diplomats stationed there, a dramatic slap against its one-time close ally Israel amid longstanding tensions over that country's raid on a flotilla headed to Gaza last year.
Low-level officials are allowed to stay but top envoys must leave by Wednesday. Turkey is angry with Israel over the raid, in which Israeli commandos clashed with Turks on one of the flotilla ships, the Mavi Marmara, and killed nine people.
This comes as a U.N. report is set to be released Friday about the May 2010 raid. The document, leaked to The New York Times, criticized Israel's actions in its raid but said the Israeli naval blockade of Gaza was a "legitimate security measure."
Turkey is seething over Israel's failure to apologize for the deadly raid. It is opposed to the Jewish state's naval blockade of the Palestinian territory of Gaza because Palestinians have suffered from the action.
Israel expressed its sorrow at the loss of life but an official said on Friday the government "will not apologize for the self-defense actions of its soldiers," saying Israel has the legitimate right to protect its citizens and soldiers.
Gaza-based militants have been firing rockets into southern Israel and Israel has responded with military might. Israel's blockade is designed to prevent weapons from being smuggled to the territory, controlled by the anti-Israeli group Hamas.
"It is about time for the Israeli government to face the consequences of its illegitimate actions since it sees itself above international law and ignores human conscience and must pay a price," Foreign Minister Ahmet Davutoglu said Friday. "This price will be, above all, the loss of Turkey's friendship."
Turkey has been Israel's closest and steadiest Muslim ally since the Jewish state was founded. The relationship has had political, economic and military components, and both countries have been stalwart Western allies during the Cold War and over the decades.
In fact, trade has grown from 2008 to 2010, according to Turkey's economy ministry's website.
Turkey's imports from Israel totaled $842 million from January to July in 2010 and $1.1 billion during the same period in 2011. Turkey's January to July exports to Israel was $1.1 billion in 2010 and $1.3 billion in 2011.
Ties have deteriorated during the administration of Prime Minister Recep Tayyip Erdogan -- long critical of Israel's policies in Gaza.
Davutoglu said military agreements have been suspended. But a senior Turkish official said existing contracts must be honored "no matter what" and "we haven't touched upon intelligence sharing."
Israel and Turkey have long had a close military relationship, but there have been no joint exercises for more than a year and a half amid tensions between both sides.
The two countries have been negotiating for months in an attempt to improve their faltering relationship, but those efforts have failed.
"We've waited and waited," the senior Turkish official told CNN. "There was almost an agreement that Netanyahu agreed upon... they're just wasting our time." He was referring to Prime Minister Benjamin Netanyahu.
"This makes it official. Before it was de facto, there was nothing going on but definitely there was contact," said the official who asked not to be named because of diplomatic protocol.
One analyst said, "Turkey has been warning Israel for months that it would do this and Israel chose to ignore it."
Hugh Pope, senior Turkey analyst with the International Crisis Group, argued that Turkey made a concession earlier this year, by preventing the Mavi Marmara from leading a second proposed blockade-busting flotilla to Gaza.
Pope said Turkey's stance on Israel could be risky in its relationship with the United States, but the country -- while critical of Israel and friendly with Iran, Israel's arch-enemy -- has been firmly in the Western camp lately.
Turkey has been an integral player in the allies' efforts in Libya and in Syria. Also, its Foreign Ministry has confirmed to CNN that Turkey agreed "in principle" to place a NATO long-range radar system on Turkish territory.
"Turkey's hosting of this element will constitute its contribution to the defense system that was developed within the new strategic concept of NATO. It will strengthen the defense capacity of NATO and our national defense system," the Foreign Ministry said.
Pope added, "But at the moment the U.S. seems to appreciate Turkey's role in the region."
The U.N. report, posted by The New York Times website on Friday, said Israel's naval blockade of Gaza was a "legitimate security measure in order to prevent weapons from entering Gaza by sea."
But it criticized Israel's actions on the ship, saying its "decision to board the vessels with such substantial force at a great distance from the blockade zone and with no final warning immediately prior to the boarding was excessive and unreasonable."
"Non-violent options should have been used in the first instance. In particular, clear prior warning that the vessels were to be boarded and a demonstration of dissuading force should have been given to avoid the type of confrontation that occurred. The operation should have reassessed its options when the resistance to the initial boarding attempt became apparent," the report said.
The report said the "loss of life and injuries resulting from the use of force by Israeli forces" during the vessel's takeover "was unacceptable." It said "no satisfactory explanation" had been provided for the deaths.
"Forensic evidence showing that most of the deceased were shot multiple times, including in the back, or at close range has not been adequately accounted for in the material presented by Israel."
The report said there was "significant mistreatment of passengers" by Israeli authorities. That took place from the takeover through deportation.
"This included physical mistreatment, harassment and intimidation, unjustified confiscation of belongings and the denial of timely consular assistance."
The report said "the flotilla acted recklessly in attempting to breach the naval blockade" and it said the actions of the flotilla needlessly carried the potential of escalation. It said most flotilla participants "had no violent intentions," but there were questions about the objectives of the flotilla organizers, particularly the Turkish non-government organization, IHH.
"Israeli Defense Forces personnel faced significant, organized and violent resistance from a group of passengers when they boarded the Mavi Marmara requiring them to use force for their own protection. Three soldiers were captured, mistreated, and placed at risk by those passengers. Several others were wounded."
Davutoglu made reference to the U.N. report on Friday, saying that it underscores Turkey's position that crimes were committed by Israeli troops on the ship. However, he disagreed with the stance that the Israeli blockade is legal.
The senior Turkish official said the U.N. report is political. The report is called the Palmer report, named after the chair of the panel of inquiry into the incident, Sir Geoffrey Palmer.
"We don't recognize the so-called blockade out of Gaza. And we leave it at that," the senior official said. "We will try to pass some kind of resolution or decision saying its not legal."
He said Turkey is willing to help any legal challenges to the blockade.
In Israel, a government official -- who asked not to be named because the report has not formally been released -- said government accepts the report -- with reservations. An Israeli official told CNN the report shows the naval blockade and its enforcement are in accordance with international law.
It said the soldiers had to protect themselves from IHH members armed with clubs, knives and metal bars.
"After many of them were injured during the operation, nine activists from the IHH organization who were threatening the lives of the soldiers were killed," the official said.
The official emphasized that the report not only confirms the blockade's legality, it states that there was no humanitarian problem in Gaza, and anyone who wished to send humanitarian aid to Gaza needs to do it in coordination with Israel and the Palestinian Authority through the land crossings.
The official said Israel hopes that there will be a way to overcome the controversy with Turkey and will continue to work toward that goal. It said it regrets efforts to settle differences didn't succeed.
"As to the ambassador in Turkey, he had finished his posting a couple of days ago and had already said goodbye to his Turkish colleagues and was expected in Israel in the coming days," the official said.
CNN's Yesim Comert, Ivan Watson and Michal Zippori contributed to this report.