After more than five years of deep hostility, Turkey and Israel are poised to restore full diplomatic relations, which were severed in 2010 after Israeli commandos killed nine Turkish activists in a raid on a Gaza-bound Turkish aid ship.

The former strategic allies reached a preliminary deal to normalize ties and exchange ambassadors during closed-door negotiations in Switzerland, Israeli officials said last week. According to media reports, Israel would set up a special fund to compensate relatives of the aid-ship victims while Turkey would drop all legal claims over the incident.

At the time the ties were severed, Turkey had reoriented its foreign policy away from the West and toward the Muslim world. Restoring diplomatic relations now makes sense for Turkey, analysts say, as it grapples with the conflicts in Syria and Iraq and their possible impact on its energy supplies. The victims’ compensation fund notwithstanding, however, Israeli policies toward Gaza remain a sticking point, some warn.

Turkish officials cautioned that a final accord has yet to be signed but confirmed the two sides were making “tangible, positive progress.”

“There is no concrete agreement,” Omer Celik, spokesman of Turkey's ruling Justice and Development Party told reporters Sunday. “Beyond all question, the state of Israel and its people are friends of Turkey.”

The long-awaited thaw comes as Turkish President Recep Tayyip Erdogan finds himself increasingly isolated from his neighbors over the war in Syria. Turkey downed a Russian warplane last month, relations with Iran are strained, and a Turkish troop deployment in northern Iraq has sparked a row with Baghdad.

“The Israelis and Turks have been hashing this out for a while, but President Erdogan decided to make the deal now because the region is unraveling and he has no place else to go,” says Steven A. Cook, an expert on Turkey at the Council on Foreign Relations.

The energy factor

Analysts say the timing of the reconciliation is largely driven by Turkey’s fallout with Moscow. The two are effectively on opposite sides of the war in Syria – Russia's air campaign is supporting President Bashar al-Assad, while NATO member Turkey backs anti-Assad rebels.

“Turkey’s desire to reconcile with Israel now is essentially a tactical move to improve ties with the United States and its Western allies following the rupture of relations with Russia,” says Fadi Hakura, a Turkey expert at London-based Chatham House. “But Israeli policymakers don’t see Turkey as a stable partner, and it will be extremely challenging for Turkey and Israel to go back to the close relationship they used to enjoy.”

Energy is at the heart of the rapprochement. Turkey relies on Russia for more than half of its gas imports and fears that Moscow could exploit this dependency in retaliation for the jet shoot-down. Russia has already slapped Turkey with modest economic sanctions while also suspending talks on the planned Turkish Stream gas pipeline project.

Israel, meanwhile, has its own ambitions for gas exports: Last week it finalized a plan to develop a second major gas field in the Mediterranean Sea and is seeking new customers. Israeli and Turkish officials have said that a renewal of diplomatic ties would pave the way for talks on a potential undersea pipeline project to deliver Israeli gas to southern Turkey.

“The Russian factor plays very heavy in this consideration as Erdogan is under great pressure in the aftermath of Russia’s threats over the Turkish Stream project,” says Dan Arbell, Senior Fellow in the Center for Middle East Policy at Brookings in Washington. “The Israeli option has been under consideration for some time now but never materialized because of stalemates over other political considerations. Now, he has the Syria crisis and the gas challenge to deal with, and suddenly it makes sense for Erdogan to try to normalize relations.”

“Erdogan is a pragmatist,” adds Mr. Arbell. “He is willing to make deals when he sees there is a concrete outcome for him – it certainly isn’t for a love of Israel.”

Gaza blockade still an issue

Turkey was the first majority-Muslim country to recognize Israel in 1949 and the two sides enjoyed a close relationship during the 1990s. But relations frayed over Israel’s conflicts with the Palestinians. The final straw was Israel’s deadly 2010 attack on a flotilla that was seeking to break Israel’s blockade of the Hamas-run Gaza Strip.

Erdogan has frequently condemned the Jewish state’s treatment of the Palestinians, accusing Israel of having “surpassed Hitler in barbarism” in the 2014 Gaza war. That rhetoric has galvanized his religious-conservative base while boosting his image in the Muslim world.

Erdogan has outlined three preconditions for reconciliation with Israel, including an apology from the Israeli government over the flotilla incident, which he received from Israeli Prime Minister Benyamin Netanyahu in 2013, and compensation to the victims of the raid, which Israeli officials now say is in the works.

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Analysts say the success of the current reconciliation effort depends on how the two sides handle Erdogan’s final demand: ending Israel’s blockade of the Gaza Strip.

“Israel is not going to lift the blockade for Turkey or anyone else, so the question is whether Erdogan would be willing to settle for less,” Arbell says. “If he insists on it, this deal is bound to fail, but if they can be creative about it and find a way to bypass things, then we might finally see a breakthrough.”