A report in an Israeli newspaper said Israel has offered Turkey $20 million in compensation to the families of those killed and wounded during Israel's botched 2010 raid on a Gaza-bound flotilla.
Haaretz, citing anonymous Western diplomats who were briefed on the negotiations, reported Monday Turkey has not yet responded to the Israeli offer.
Israel's relations with Turkey plummeted after commandos stormed the Mavi Marmara, which was sailing toward Gaza with aid supplies. Israel said Turkey was breaking a blockade and that Israeli troops opened fire in self-defense.
Ankara demanded a formal apology and compensation for the families of nine killed and several others wounded.
Negotiations began early last year after Israel extended a formal apology to Turkey.
Haaretz said talks stalled for several months, but were revived in December when Israeli negotiators traveled to lstanbul and Turkey lowered its demands for compensation.
The newspaper said Turkey demanded $30 million, which was still double the $15 million that Israel was initially prepared to pay.
The daily said in the weeks following the talks, Israeli Prime Minister Benjamin Netanyahu decided to up the offer to $20 million and gave his negotiating team permission to go up to $3 million higher, "if necessary, to secure an agreement."
The report in Haaretz said the money would not be paid directly to the wounded or the families of the dead, but would instead be "deposited in a humanitarian fund and distributed to the victims in accordance with defined criteria."