(Bloomberg) -- Turkish President Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu plan to meet as early as next month as they try to improve long-frosty relations between their countries, according to people familiar with the situation.

Turkey and Israel, once close military allies, are collaborating more on tourism and business — and are exploring ways to start gas shipments to Turkey — after over a decade of tensions. Ties hit a low point after a 2010 Israeli raid on a Turkish flotilla headed to the Gaza Strip. They only resumed full diplomatic relations in August last year.

The disruption to supply chains and commodity markets from Russia’s invasion of Ukraine is providing a fresh incentive to mend ties, said the people, who asked not to be identified discussing confidential matters.

So are Iran’s activities in the region. Turkey is concerned about the growing influence in Syria of the Islamic Republic, which backs groups hostile to Israel including Hezbollah in neighboring Lebanon. In the Caucasus, Azerbaijan benefited from Israeli and Turkish drones to reclaim control of large swaths of its territory occupied by Armenia since the early 1990s before Russia brokered a cease-fire in November 2020. 

Both Israel and Turkey are seeking to improve ties with other Middle Eastern states. Israel established diplomatic relations with nations such as the United Arab Emirates and Morocco in 2020, and is pushing to do the same with Saudi Arabia. Turkey and Saudi Arabia patched up ties last year.

Israeli President Isaac Herzog met Erdogan early last year, a key initial step to repairing relations.

Erdogan and Netanyahu could meet in Ankara in July, schedules permitting, according to the people.

Both are under domestic pressure. The Israeli leader has faced mass protests over his attempt to weaken the power of the judiciary, while Erdogan has revamped his economic team since his re-election last month in a bid to end a cost-of-living crisis.

Talks may encompass the potential export of liquefied natural gas from a field off the Gaza Strip to Europe via Turkey, they said, although it’s unclear how much gas is there and distributing it remains years away. There are also no LNG export terminals, which typically cost billions of dollars to build, in Israel or gas pipelines running from there to Turkey.

Turkey’s government and Israel’s embassy in Ankara declined to comment.

Divisions Remain

Turkey and Israel remain divided over the status of Palestinian territories. Israel also accuses Ankara of supporting Hamas, the Islamic militant group that runs the Gaza Strip. 

A gas agreement may help heal the rift, the people said. Netanyahu’s office said Sunday that Israel would allow the development of a field off Gaza as part of efforts to bolster the ailing Palestinian economy and maintain regional calm.

Bilateral trade between Turkey and Israel is increasing and tourism is booming as cruise lines resume trips and Israeli companies start direct flights to Turkish resorts such as Antalya and Bodrum. More than 1 million Israeli tourists are expected to visit Turkey this year, compared with 843,000 in 2022.

Turkey’s exports to Israel increased 11% to $7 billion last year, while imports were around $2.5 billion, according to official Turkish government data. 

Israeli companies are seeking to do more business with Turkey, partly because higher shipping costs are making supplies from China more expensive. Israel mainly imports steel, iron and other construction materials from Turkey.

(Updates with details in fourth paragraph.)

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