Ship clash leaves Israel in diplomatic hot water

Riot policemen stand near a ''Star of David'' thrown by pro-Palestinian protesters outside the Israeli embassy in Athens, May 31, 2010.

JERUSALEM (Reuters) - Israel could pay a heavy price -- including damage to peace efforts with the Palestinians -- over the killing of 10 international activists on a Turkish ship trying to break a blockade of Gaza.

Foreign anger at the boarding of the pro-Palestinian flotilla was loud even among Israel's allies and may drown out its argument that such action was needed to keep Gaza's Hamas rulers isolated and peacemaking efforts afloat.

Islamist Hamas's rival for Palestinian loyalties, secular president Mahmoud Abbas, was quick to condemn the naval attack as a "massacre" -- an ill omen for the U.S.-mediated negotiations with Israel on which he embarked three weeks ago.

President Barack Obama will have to balance relations with Turkey and other Muslim allies of the United States against Washington's ties with Israel.

Israeli Prime Minister Benjamin Netanyahu, on a visit to Canada when the Israeli raid took place, canceled a planned White House meeting with Obama on Tuesday and would leave later on Monday for home, Israeli officials said.

The relationship between the two leaders has already been strained by Israel's settlement policy in the West Bank -- where Palestinians also seek statehood -- and Obama has urged Netanyahu to ease access to Gaza's 1.5 million residents.

Netanyahu's White House invitation was widely seen in Israel as an attempt by Obama to mend fences -- and shore up U.S. Jewish support for Democratic candidates in a November mid-term election -- after a frosty Oval office meeting in March.

But Oussama Safa of the Lebanese Center for Policy Studies predicted Obama might "ante up the pressure against the Israelis" to accommodate Palestinian demands -- though the Netanyahu government has said the Gaza blockade will remain.

Another delay in negotiations that have been stop-start for almost two decades would hold little real impact. Abbas, with his truncated West Bank mandate, is too beholden to Israel and the United States to close the door on rapprochement.

But the possibility of a fallout with Turkey, whose flag was flown on the flotilla and which recalled its Tel Aviv envoy in protest at the naval raid, could deepen Israel's own isolation even as it tries to present Iran as the main regional threat.

FOR HAMAS, HEROES

Turkey, a non-permanent member of the U.N. Security Council, said it would seek a resolution against Israel -- a poke in the eye for Israel and the United States, which would prefer to see the Council sanction Iran for its nuclear programme.

Rising Iranian power has stirred concern among many Arabs, to Israel's advantage. But the Palestinian crisis makes such sympathies fickle, as Israeli Trade Minister Binyamin Ben-Eliezer discovered while on a official visit to Qatar.

"I see all the looks that I'm getting," Ben-Eliezer told Israel's Army Radio by telephone.

Hamas, which has largely fallen from world headlines since its war with Israel some 18 months ago, welcomed what it described as a win-win situation from the violence at sea.

Hamas government head Ismail Haniyeh said of the activists: "You were heroes, whether you reached (Gaza) or not."

Israel insisted its commandos opened fire when they were attacked by gun- and knife-wielding activists aboard one of the flotilla's six vessels. At least seven marines were wounded.

But, as with its crackdowns against a Palestinian uprising in the early years of the past decade, Israel will face tough questions abroad about the wisdom of using military force for what are essentially policing missions -- especially when the nationalities of the dead are made public.

Nahman Shai, a former Israeli military spokesman turned opposition lawmaker, likened the confrontation to the police killing of a dozen Arab citizens of Israel who demonstrated in solidarity with the Palestinians in late 2000.

"The difference is that this time foreigners are involved, which means a much wider impact," Shai told Israel Radio.

(Additional reporting by Mohammed Assadi in Ramallah, Nidal al-Mughrabi in Gaza and Yara Bayoumy in Beirut; Editing by Alastair Macdonald)