David Cameron was embroiled in an angry diplomatic row with Israel tonight after describing the Gaza Strip as a prison camp for its 1.5 million Palestinian residents.

The prime minister drew fire at home and in Israel for remarks he made in Turkey about the need to further ease the blockade of the coastal territory, following the lifting of some restrictions last month. But Arabs and many others will agree wholeheartedly with his words.

"The situation in Gaza has to change," he told businessmen in Ankara. "Humanitarian goods and people must flow in both directions. Gaza cannot and must not be allowed to remain a prison camp."

Foreign Office sources suggested Downing Street had been remiss in omitting from Cameron's speech the sort of "balancing" comments that are routinely made about Israel's security – especially the fate of a captured soldier being held by Hamas – when its policies on the Palestinians are criticised.

The prime minister condemned Israel's attack on the Gaza aid flotilla, in which nine Turks were killed, as "completely unacceptable", though he ignored demands by Turkey for an international investigation, expecting Israel's inquiry to be "swift, transparent and rigorous". But it was his message on Gaza that drew the strongest reaction.

Ron Prosor, Israel's often combative ambassador to Britain, hit back with a sharp statement: "The people of Gaza are the prisoners of the terrorist organisation Hamas. The situation in Gaza is the direct result of Hamas's rule and priorities." Prosor also took aim at a striking omission by Cameron: his failure to mention the soldier Gilad Shalit, who was captured on the Gaza border in 2006 and whose freedom is a cause celebre in Israel.

"We know that the prime minister would also share our grave concerns about our own prisoner in the Gaza Strip, Gilad Shalit, who has been held hostage there for over four years, without receiving a single Red Cross visit," Prosor said.

Downing Street and the Foreign Office said the prime minister's remarks did not constitute a change of policy. But their tone, timing and location meant they quickly snowballed into controversy. "We understand why things like this are being said in Turkey," said another Israeli official, "but the phrase 'prison camp' doesn't sound good to Jewish ears."

Foreign Office advice in Middle East briefings is that "emotive" language should be avoided at a time when relations with Israel are improving after the row over the use of forged UK passports by Mossad agents who assassinated a top Hamas official in Dubai.

Israel has also welcomed a much-discussed and controversial change in the UK to the law of "universal jurisdiction" which can be used to prosecute Israeli minsters or military personnel suspected of war crimes. The speechwriters for Cameron seem to have ignored all this.

Cameron defended himself later at a press conference with Recep Tayyip Erdogan, Turkey's prime minister. "My description of Gaza is something I said in the House of Commons several weeks ago. Perhaps this is final proof that if you want to keep something completely secret you should announce it in the House of Commons." A No 10 source added: "This is not an elevation of the rhetoric. This is equivalent language."

Cameron's critics were not placated, some suggesting he has been influenced by the pro-Palestinian positions of his Liberal Democrat coalition partners.

"In calling Gaza a 'prison camp', the prime minister has failed to address Hamas's role in creating the Gaza we see today," said Stuart Polak, director of Conservative Friends of Israel. "The organisation's obsessive hatred for Israel and continued terrorist tactics have long overridden any concern for the welfare of the Palestinian people.

"The prime minister should be calling on Turkey to play a positive role in tackling Hamas; to ensure that Hamas accepts the Quartet principles and to insist on the immediate release of Gilad Shalit."

Pro-Israel blogger Robin Shepherd accused Cameron of "employing the kind of deeply hostile rhetoric against Israel that is more usually associated with the extremist and activist community or with well-known detractors of the Jewish state in the British media".

The prime minister's language "lies at the softer end of an extreme form of discourse which routinely describes Gaza as an 'open-air prison' or even a 'concentration camp' and which always airbrushes Hamas anti-Semitism and its annihilationist ambitions against Israel and the Jews out of the equation", Shepherd added.

Israel points out that humanitarian aid already flows into Gaza, though the UN and NGOs insist that much more needs to be allowed in, and exports permitted. The area suffers from chronic shortages of housing and facilities for education, clean water, sanitation and health.

The Israeli government appeared tonight to be playing down the incident. But Cameron's remarks clearly touched a raw nerve. Ephraim Sneh, a former Israeli Labor party deputy defence minister, said: "Cameron is right. Gaza is a prison camp, but those who control the prison are Hamas. I'm totally against the double standards of a nation which fights the Taliban but is showing its solidarity with their brothers, Hamas. It's very regrettable that the British PM doesn't understand that. Cameron doesn't understand that 1.5 million people live in Gaza under the repressive regime of Hamas – and yet he blames Israel."

Recent UK/Israel disagreements

2010 March UK government expels a Mossad representative at Israeli embassy in London, over forged British passports used by suspected killers of a Hamas commander in Dubai..

2009 December UK court issues arrest warrant for Israel's former foreign minister Tzipi Livni over alleged war crimes during her country's Gaza offensive. The warrant, backed by pro-Palestinian groups, is rescinded when Livni fails to appear at a meeting in the UK.

September Lawyers acting for Palestinian families try to obtain a British warrant against Ehud Barak, the Israeli defence minister during the Gaza war. They fail because Barak is regarded as having diplomatic immunity.

1998 March Israel's prime minister, Binyamin Netanyahu, cancels dinner with British foreign secretary, Robin Cook, claiming the politician had embarrassed him by meeting Palestinians at a disputed Jewish settlement site..