The Israeli government's failure to make an apology over a deadly raid on a Gaza-bound Turkish aid ship has further soured the relations between the two countries.

Turkey announced Friday its decision to expel Israel's ambassador and downgrade its diplomatic ties with Israel to the second-secretary level, in response to Israel's refusal to apologize over the May 2010 raid that killed nine Turkish nationals, one of them a U.S. citizen.

In addition, Turkey also declared freezing of all its military pacts with Israel, its former ally in the region, a day after a long-delayed United Nations investigation report on the incident was leaked to media late Thursday.

The findings of the UN-mandated inquiry into the incident, headed by Geoffrey Palmer, a former prime minister of New Zealand, have been delayed three times due to Israel's request.

The leaked report said Israel had used "unreasonable" force in the raid, but on the other hand gave support to Israel's argument that its naval blockade of the Palestinian enclave was legal.

"All personnel above the second-secretary level, primarily the ambassador, will go back to their countries by Wednesday at the latest," Turkish Foreign Minister Ahmet Davutoglu told a press conference in the Turkish capital of Ankara Friday.

"No state is above the laws," the minister said. "The time has come for Israel to pay a price for its illegal actions. This price, first of all, is being deprived of Turkey's friendship," Davutoglu said as he announced the measures.

The last time Turkey downgraded diplomatic ties with Israel to the second-secretary level was in 1980 when Israel proclaimed Jerusalem as its capital.

Ankara has already withdrawn its ambassador from Tel Aviv not long after the Israeli raid to the ship Mavi Marmara.

Davutoglu said that as a country with the longest coastline on the Mediterranean, Turkey would take every precaution which it considers necessary for the safety of maritime navigation in the East Mediterranean, a hint that Turkey may increase its military presence in the East Mediterranean.

Turkey and Israel signed a military cooperation accord in 1996 and there are currently 16 military agreements in effect between Turkey and Israel, worth tens of billions of U.S. dollars.

Following Israel's lethal raid in 2010, Ankara had already suspended military cooperation with Israel such as joint military exercises and barred Israeli military aircraft from Turkish airspace.

Davutoglu said Turkey did not recognize Israel's blockade on Gaza and would take the issue to the International Court of Justice in The Hague and ask it to examine Israel's Gaza blockade on May 31, 2010.

"For this aim, we are starting initiatives to put in action at the UN General Assembly," he said.

As another measure against Israel, Turkey would support Turkish and foreign victims of the raid to seek justice from courts, the minister said.

Turkey has long demanded Israeli apology and compensations for victims of the incident. The Israeli government has refused several times to make such a gesture.

The minister stated that Turkish and Israeli officials had held four rounds of talks for reconciliation and reached a consensus on two draft texts. Those texts were also approved by Israeli Prime Minister Benjamin Netanyahu, but failed to get through the Israeli cabinet, he added.

Although the UN report has yet to be released, Turkish President Abdullah Gul said Ankara considers it "null and void."

He warned that Ankara may take further measures against Israel, "depending on how things will develop and how Israel will behave."