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Turkish Prime Minister Recep Tayyip Erdogan said Sunday in Toronto in the wake of the G20 conference that Turkey will no longer routinely give Israeli military aircraft permission to fly in Turkish airspace. The announcement came as Turkey forbade an Israeli military airplane (taking officers on a visit to the sites of Nazi death camps for Jews in Poland) to fly over its territory. The Turkish press denies that the destination of the plane influenced the decision.

Future Israeli military overflight permissions will be granted on an ad hoc basis.

From the Guardian: ‘Israel’s Ynet news website reported that other military flights had also been quietly cancelled. “Turkey is continuing to downgrade its relations with Israel,” an unnamed official told Ynet. “This is a long-term process and not something that began just after the flotilla incident. We are very concerned.” ‘

Israel should be very concerned, since it is significantly more isolated in the Mediterranean than it has ever been in its history. And this isolation derives from Israeli policies, of illegal blockades of, and systematic land theft and displacement of occupied civilians under its control, along with aggressive wars on neighbors, which target infrastructure and civilians and are clearly intended to keep neighbors poor and backward.

I do not know if the Turkish air force has “identify friend or foe” codes. But it is possible that it does, and that it gives the code to regional military allies. Thus, US planes flying out of Incirlik air force base in Turkey to Iraq could be putting out IFF codes that reassure Turkish fighter jets on patrol that they are friendly. US aircraft certainly use this system to reassure each other. Erdogan’s announcement may mean that the Israeli air force used to have the Turkish IFF codes, but that they have now been changed and have not been shared with Tel Aviv. As a result, every overflight would have to be individually authorized or risk being suspected of being hostile and shot down.

The change in policy is significant because the Israeli air force in the past has flown over Turkey without permission for military purposes. Thus, when Israel bombed a Syrian facility it claimed was a budding nuclear reactor in October, 2007, its fighter jets flew over Turkish territory. Erdogan is said to have been surprised when it was reported to him that jettisoned Israeli fuel tanks from the raid had been found inside Turkey. But if the Israeli air force had Turkey’s IFF codes, they would not have needed prior permission for that overflight and would not have needed to worry about being mistaken for hostiles by the Turkish air force. And, Israeli officers could have been confident that the Turkish generals or “pashas” in Ankara would hardly complain very much about a potential nuclear reactor in Syria having been taken out. Turkey and Syria for decades had bad relations.

But now things have changed radically. Erdogan has a policy of pursuing good relations with immediate neighbors. He takes this policy so seriously that he has just removed Iran and Greece from Ankara’s “Red Book” or classified list of security threats. Erdogan has also made friends with Syrian president Bashar al-Asad. In fact, he offered Ankara’s good offices for indirect Israeli-Syrian talks that may have been going somewhere when the Israeli leadership suddenly brutally attacked Gaza in December-January 2008-2009, shocking and dismaying Erdogan and so angering Damascus that the talks collapsed, perhaps for the long term.

The political culture of the Israeli elite, which tends to treat allies as patsies, has left Erdogan scarred and grouchy. After the Israeli commando attack on the Turkish Mavi Marmara aid ship on May 31, which left 8 Turkish citizens and one American dead, Erdogan demanded an apology from Prime Minister Binyamin Netanyahu. He has received none. He demanded an international investigatory commission. Israel rejected that request. He wants an end to Israel’s blockade of Palestinian civilians in Gaza. The Israelis announced they would let in a third more trucks, but even with that change only a fourth of the goods would go into Gaza this year as went in before the blockade.

Erdogan appears to have spent a lot of time at the G20 meeting in Toronto showing other leaders, such as Dimitry Medvedev of Russia and Barack Obama, the forensics reports on the Israeli commandos’ killing of humanitarian workers on the Mavi Marmara. He pressed on Obama the need for an Israeli apology, and Erdogan says that Obama agreed with him, and pledged to convey the message to Netanyahu when they meet in Washington on July 7.

Erdogan has been repeatedly sandbagged and played by Israeli decision-makers, presumably on the theory that with Turkey’s candidacy for the EU going nowhere fast, and Turkey’s relations with the Arab world and Iran traditionally poor, Ankara had nowhere to go for friends but Tel Aviv and Washington.

What the Israeli politicians do not seem to have realized is that with the repeated election of the Justice and Development Party in Turkey and the consolidation of power in Erdogan’s hands, Ankara has a new and robust foreign and commercial policy with several planks.

Turkey’s candidacy for the European Union gives it excellent access to European markets even while it waits for a decision. It does $20 billion a year in business with Germany, $5 billion a year with Holland, etc. This access to Europe from the late 1990s has helped spur a Turkish economic miracle. (In some ways, it matters less if Turkey is admitted to Europe than if it just manages to remain a candidate for decades). Turkey has already undergone a demographic transition, so ever-increasing population growth no longer blunts gains in economic growth. The country, now 72 million, will likely level off at 90 million. Even as Turkey maintains and strengthens its European links, it has been since the late 1940s a member of NATO and its troops fight in Afghanistan.

But Europe (to which the Islamically tinged Justice and Development Party is especially committed) is only one wing of Turkey’s foreign policy. It has two others– the United States, and the Middle East. Turkish exports to Iran in 2009 amounted to $2 billion, up from only $320 million in 2002. Turkey does $3 billion a year in trade with Lebanon, Syria and Jordan, more than the $2.5 billion it does with Israel. And the total Turkish trade with the Arab world is now a whopping $30 billion per annum–12 times its trade volume with Israel. Some 20 percent of Turkey’s exports go to the Arab world (up from 12% in 2004), while 50% of its exports go to Europe. And Ankara’s flag is following its trade.

Some Western observers misunderstand Erdogan’s foreign and trade policies as increasingly oriented to the Middle East rather than to the West. That interpretation is incorrect. Erdogan does not want to substitute the Middle East for Europe. He wants to add the Middle East to Europe as spokes in Turkish diplomacy and commerce. A Turkey nearly as big as Germany, with a rapidly growing economy, which can offer itself as a bridge between Europe, the Middle East, and the US, could emerge as an indispensable country in the 21st century.

Israel is therefore not, as Tel Aviv appears to have earlier imagined, the only regional game in town for Turkey. It is a source of military technology and tourism and a way of cultivating good relations with Washington. But if Israel is going to keep embarrassing Erdogan with one SNAFU after another, it just isn’t that important and can be jettisoned.

And one dimension of Israel-Turkish military relations has just been jettisoned.