U.S. Secretary of State Hillary Clinton on Monday urged Turkey to better ties with Israel after a flotilla ship raid poisoned relations between the U.S.' two close allies. "She encouraged Turkey to keep the door open," a senior U.S. official said of Clinton's meeting with Turkish Foreign Minister Ahmet Davutoglu in New York.

Turkey had turned down U.S. offers to mediate in its showdown with Israel, with Davutoglu sticking to Turkey's demand for an apology from Israel Saturday.

"We want to see them repair their relationship, so she encouraged them to avoid any steps that would close that door and on the contrary to actively seek ways that they can repair important relationship with Israel," the U.S. official told reporters.

Washington is eager to see Turkey-Israel ties return to normal, as it faces another showdown at the United Nations when the Palestinians are expected to demand recognition of their statehood.

Turkey expelled the Israeli ambassador and froze military ties and defense trade deals with Turkey early this month, as Israel refused to apologize over the ship raid in May 2010 leading to killings of eight Turks and one U.S. citizen of Turkish origin.

U.S. President Barack Obama is scheduled to meet with Turkish Prime Minister Recep Tayyip Erdogan on Tuesday on the sidelines of the UN General Assembly meeting.

Obama has also decided to hold talks with Israeli Prime Minister Benjamin Netanyahu, but the time is not finalized.

Despite vehement opposition from the U.S. and Israel, the Palestinian Authority has decided to press ahead with its plan to seek full membership at the UN Security Council. The U.S. has vowed to use its veto but risks alienating the Arab world.