Turkish Foreign Minister Ahmet Davutoglu said in the Turkish capital of Ankara on Friday that Turkish-Israeli diplomatic relations would be downgraded to the level of second-secretary.

In the light of a UN report on last year's Gaza-bound flotilla raid, which includes accusations against both Israel and Turkey, Davutoglu announced at a press conference that his country would further reduce diplomatic relations and suspend all military ties with Israel as the Jewish country refused to apologize for the deadly attack.

This means Turkey will recall its ambassador to Israel and replace him with not even a consul, but a second secretary, a lower diplomatic rank. Israel's ambassador to Turkey will also be required to return home.

The expulsion of Israeli ambassador is just one step in many possible measures taken against Israel if it still refuse to apologize for the flotilla raid incident, Turkish President Abduallah Gul said in Turkey's largest city of Istanbul on the same day.

Gul's comments came hours after the Turkish foreign minister announced the downscale of diplomatic relations with Israel, saying the move was a direct response to Israel's refusal to apologize for the deaths of nine Turkish nationals in the May 2010 raid.

On May 31, 2010, Israeli commandos raided a humanitarian aid flotilla, Mavi Marmara, heading for Gaza, killing nine Turkish nationals, one of whom was a U.S. citizen.

"Turkey, as a country with the longest coastal line in the Eastern Mediterranean, will take every necessary measure pertaining to freedom of navigation," Davutoglu said.

Davutoglu said that Turkey did not recognize Israel's blockade over Gaza, moreover, it would demand such issue to be reviewed by the International Court of Justice.

Turkey called back its ambassador to Israel immediately and demanded Israel to make a formal apology, pay compensation to the families of the victims and to end its blockade over Gaza.

The United Nations established an inquiry panel to examine the incident. The UN panel's long-awaited report, expecting to be handed over to UN Secretary-General Ban Ki-moon on Friday, declared that Israel's naval blockade of the Gaza Strip was legal and appropriate, but that the raid of the flotilla was "excessive and unreasonable."

Earlier, a copy of the 105-page report has been obtained by the U.S. daily New York Times.

In response to the report on Mavi Marmara, Davutoglu said the report described the Israeli attack as "excessive and unreasonable " and the deaths and injuries caused by Israeli soldiers as " unacceptable".

However, the report also said that Israel's blockade against Gaza is legitimate, which was not unacceptable to Turkey, said Davutoglu, claiming the blockade "inhumane".