Negotiations between Israel and Turkey to resolve the Gaza flotilla crisis stalled late last week.

Israel has refused to apologize for the killings of Turkish activists aboard the Mavi Marmara and Turkey has refused to promise to abstain from legal action against Israeli soldiers and declare that the soldiers acted in self-defense.

An Israeli official told Haaretz that the talks are "stuck" and that "differences are still great." Nonetheless, he said it is still early to declare the talks dead and expects further discussions very soon. A Turkish Foreign Ministry spokesman also stated on Friday that the talks will resume soon.

During telephone conversations between the sides on Thursday it became clear that Turkish Prime Minister Tayyip Erdogan had rejected two key Israeli demands. Erdogan refused to absolve the Israeli soldiers of malice by recognizing that they acted in self-defense.

The Turkish Daily News reported Saturday that representatives of Turkey and Israel met in Geneva to discuss an Israeli request for a formal agreement with Turkey and the families of the Turkish citizens killed on the Mavi Marmara, which would prevent future suits against Israel or Israeli soldiers.

Israel hopes, through such an agreement, to lift the threat posed by an international investigation into the incident.

According to previously published reports, Israel had offered $100,000 to each Turkish family that lost a family member during the takeover of the Mavi Marmara. Turkish Foreign Minister Ahmet Davutoglu, however, called these figures "pure speculation."

A senior Turkish source told Haaretz that the disagreement now revolves over the wording of the Israeli apology and not the issue of compensation.

The Turkish source said that Israel wanted Ankara to accept a draft which says that it is "sorry" for the killing of Turkish citizens but that Erdogan rejected this proposal.

The current draft Israel is proposing stipulates that although it apologizes for the killing of Turkish citizens, it does not accept responsibility for their death because Israeli soldiers were acting in self defense. Erdogan has not yet approved this version, and he will have the final say.

Zaman, a Turkish daily which supports Erdogan's party, Saturday quoted official sources saying that the talks in Geneva were disrupted "because of the stance of the Israeli army which is similar to that of [Avigdor] Lieberman." These sources also said that Defense Minister Ehud Barak is opposed to an Israeli apology, even though he attaches great strategic importance to relations between Israel and Turkey.

Turkey is also apparently interested in bringing the matter to a close, and Davutoglu is scheduled to visit New York next week where he will meet with U.S. Vice President Joe Biden. The two are expected to discuss ways of rehabilitating relations between Israel and Turkey in view of the strong criticism of Turkey in Congress.

Meanwhile, Turkey's Deputy Prime Minister Cemil Cicek said that it will take time for relations between Turkey and Israel to mend and that this may happen only as the June 2011 elections in Turkey approach - assuming Israel accepts Turkey's conditions. This would seem to indicate that members of the ruling party, AKP of Prime Minister Erdogan, believe their chances of winning the next election will depend on relations with the United States and Israel.