Military relations have been at the core of the Ankara-Jerusalem entente. These took off in February 1996 when the two sides signed a military training agreement that had Israeli air force jets flying over Anatolia, making the Turks the first Muslim-majority people to establish a formal military link to Israel.
Similarly, the end of the entente has just taken place. The decision by the Israelis to cancel a $141 million military deal signed with Turkey in 2008, out of concern that the Turks might deliver the state-of-the-art aerial intelligence system based on electro-optic sensors to enemies of Israel.
Erdoğan staged a high-profile break with Shimon Peres as his victim in early 2009.
Comment: It's deeply unfortunate that the vagaries of Turkey's electoral politics permitted an Islamist party to dominate the country in 2002 – but at least the Israelis (and French) recognize this development, unlike the Americans, who persist in thinking all is well. (December 22, 2011)
Jan. 22, 2012 update: The affair may be over but commerce is growing. In surprise news, Israeli exports to Turkey rose 42 percent in 2011 over what they had been in 2010, making them roughly the same in value as exports to Germany (US$1.85 billion vs. $1.94 billion). Israeli imports from Turkey increased 21 percent from 2010 to $2.1 billion in 2011.