Turkey has warned Israel it will cut ties unless it gets an apology for a deadly raid on Gaza-bound aid ships.
However, the Jewish state said it will never say sorry for defending itself.
Ankara had already closed its airspace to all Israeli military aircraft in reaction to the 31 May incident on a Turkish ship in which nine Turks were killed, Foreign Minister Ahmet Davutoglu told the daily Hurriyet.
The Israelis had three options, Mr Davutoglu said in remarks published today.
'Either they apologise, or accept an international (inquiry) commission and its report, or relations will be broken,' he said.
Turkey has called for an international probe into Israel's interception of the flotilla, but Mr Davutoglu said Ankara would not reject Israel's own inquiry if it resulted in an apology and compensation of the victims' families, according to Hurriyet.
'If their own commission concludes that the raid was unjust and if they apologise, that will be sufficient,' he said, although he insisted on compensation.
Israeli Prime Minister Benjamin Netanyahu had already ruled out any apology on Friday and a senior government official today reiterated those comments.
'Israel will never apologise for defending its citizens,' the official told AFP.
'Of course, we regret the loss of life but it was not the Israeli side that initiated the violence,' the official said.
Mr Davutoglu said he had presented Turkey's position during talks in Brussels on Wednesday with Israeli Trade Minister Benjamin Ben Eliezer, in the first high-level contact since the crisis erupted.
'We will not wait for eternity for an Israeli answer,' he said.
'If they do not make any move (to meet Turkey's expectations), the process of isolating Israel will continue,' he added.
Mr Davutoglu also said the decision to close Turkey's airspace to Israeli military aircraft 'was not taken for only one or two airplanes,' hinting the sanction could be extended to civilian flights as well.
The boarding by Israeli marines of the Mavi Marmara ferry, one of a number of boats trying to take aid to Israeli-blockaded Gaza, killed eight Turks and a dual US-Turkish citizen.
The attack prompted Ankara to recall its ambassador from Tel Aviv and cancel three planned joint military exercises.
Relations between the one-time allies were already strained over Israel's devastating invasion of Gaza last year, which triggered vehement Turkish criticism.
