Turkey would like better ties with Israel but Israeli policy towards the Palestinians remains "unacceptable", President Tayyip Erdogan said Friday.
Turkey and Israel, once allies, have had a bitter falling out in recent years.
Ankara has repeatedly condemned Israel's occupation in the West Bank and its treatment of Palestinians.
It has also criticised recent US-brokered rapprochements between Israel and four Muslim countries.
"The Palestine policy is our red line. It is impossible for us to accept Israel's Palestine policies. Their merciless acts there are unacceptable," Erdogan told reporters after Friday prayers in Istanbul.
"If there were no issues at the top level (in Israel), our ties could have been very different," he said, adding that the two countries continued to share intelligence. "We would have liked to bring our ties to a better point."
Israel's Foreign Ministry declined to comment on Erdogan's statement.