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Israel wants to stop Turkey ties worsening-Netanyahu
* Israel rejects Turkish demands to apologise for the raid
* Netanyahu to meet Obama next week in Washington
(Adds quotes to clarify, grafs 6,7)
By Allyn Fisher-Ilan
JERUSALEM, July 2 (Reuters) - Prime Minister Benjamin Netanyahu said on Friday Israel could not apologise for a raid on a Gaza-bound flotilla in which nine Turks died, but stressed that he wanted to avoid further harm in relations with Ankara.
Netanyahu made the remarks before a planned meeting next week with U.S. President Barack Obama in Washington, whose administration has been prodding its two important Middle East allies to mend fences after the raid in May.
"Israel cannot apologise that its soldiers were forced to defend themselves against a mob that almost butchered them; they defended themselves from a lynch. We regret the loss of life," he said in an interview with state-owned Israeli television.
Turkey has been pressing for Israel to apologise for the May 31 raid and pay compensation to its victims when troops boarded a vessel to enforce an Israeli blockade on the Gaza Strip.
"There are still no agreements between us and Turkey," Netanyahu said. "But it is good to try to stop the deterioration" in relations.
Turkey, a strategic regional ally of Washington and for more than a decade of Israel as well, has withdrawn its ambassador from Tel Aviv and cancelled military exercises with Israel since the May 31 raid.
Netanyahu confirmed that one of his cabinet ministers met a Turkish official this week, in what was seen as the highest level contact between the states since the flotilla incident.
A Turkish official said Foreign Minister Ahmet Davutoglu had met Israeli Trade Minister Benjamin Ben-Eliezer in Brussels on Tuesday and spelled out Turkey's terms for making amends.
In a statement on Wednesday Netanyahu's office had said that Ben-Eliezer, a cabinet veteran, held an unofficial meeting with a Turkish official and that "in recent weeks there have been various initiatives for contacts with Turkey".
Israel has responded to a world outcry against the Gaza blockade, which the Turkish-backed flotilla cast a spotlight on, by easing the embargo, now allowing in most civilian goods.
It says the blockade aims to prevent weapons smuggling into Gaza, which is controlled by the Islamist group Hamas.
Israel has also named a judicial-led panel to investigate the raid, and after criticism from Turkey that its authority was too limited, has said it may expand the team's mandate to enable it to subpoena witnesses who would deliver sworn testimony.
Gaza, ruled by Hamas which says it seeks to destroy the Jewish state, is home to 1.5 million Palestinians whom international aid groups have said were at risk of facing a humanitarian disaster had Israel not let in more supplies.
In addition to civilians goods reaching Gaza via land crossings with Israel, other supplies reach the coastal territory through its separate border crossings with Egypt. (Editing by David Stamp)
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