By Ayla Jean Yackley
ISTANBUL (Reuters) - Long-running efforts to fully restore Israeli-Turkish relations have made good progress but need a few more rounds of negotiations, though a political shift in Turkey should not affect the process, Israel's top diplomat in the country said.
The impetus behind fixing a relationship badly damaged by a clash over Gaza in 2010 is now security, especially with Islamic State and other jihadists holding swathes of Syria, which Israel and Turkey both border, said Israeli consul-general Shai Cohen.
But restoring military cooperation will take time, he added, without elaborating.
Ankara downgraded diplomatic ties and ejected Israel's ambassador in 2011, a year after Israeli commandos stormed the Mavi Marmara, a ship in an aid flotilla trying to break Israel's blockade of the Islamist-ruled Gaza Strip, and killed 10 Turks aboard. Israel is currently represented in Turkey by Cohen.
The two sides have signalled for months they are on the cusp of a deal that is expected to include compensation for the Mavi Marmara victims and an easing of the Gaza blockade.
Israeli officials said a deal was reached in December, and President Tayyip Erdogan said in March he expected positive results soon, raising hopes an agreement was imminent.
"The reconciliation process between Israel and Turkey has reached an advanced momentum. We hope the reconciliation process won't be affected by the political shift in Turkey," Cohen said.
Turkish Prime Minister Ahmet Davutoglu said last week that he would step down on May 22, following an increasingly public rift with Erdogan. Forming a new government could delay both domestic and foreign policy initiatives.
The next meeting between Israeli and Turkish negotiators will have to await the composition of Turkey's next government on May 22, Cohen told reporters late on Monday.
"I believe it will take another round or two in order to conclude the deal ... Most of the issues between Israel and Turkey are already, to a certain extent, clear."
SYRIA AS IMPETUS
NATO member Turkey and Israel cooperated militarily beginning in the 1990s, a relationship seen as vital to Middle East stability by the United States but viewed warily by Erdogan's Islamist-rooted AK Party, in power since 2002.
Apart from a joint interest in neutralising Islamist militants in Syria, another impetus for Israel and Turkey to mend relations is natural gas. Energy-poor Turkey wants to pipe gas out of Israel's offshore Leviathan field, estimated to hold 500 billion cubic metres, for domestic use and export.
"Everyone is looking forward to see how Israel can export to Turkey, and through Turkey to the West, natural gas," Cohen said.
He ruled out Israel lifting its blockade on Gaza in place since 2007, when Palestinian Hamas militants seized control of the enclave, calling it a "non-issue," even though Erdogan has repeatedly made it a condition for restoring relations.
Talks instead were focusing on how Turkey can bring goods overland to rebuild Gaza, whose infrastructure has been battered by the blockade and Israeli incursions. About half of building goods in Gaza are from Turkey, and this could be increased in line with Israel's capacity to monitor shipments, Cohen said.
Israel wants to ensure that Turkish supplies for Gaza do not amount to cooperation with Hamas, which is classified as a terrorist group by Israel, the United States and European Union.
Israel accuses Turkey of hosting a Hamas command centre and wants Ankara to bar leaders of the Islamist group. Erdogan met Hamas leader Khaled Meshaal in Istanbul as recently as December.
(Editing by Daren Butler and Mark Heinrich)