Israel's defence minister Moshe Ya'alon said that Islamic State (Isis) militants had been funded with "Turkish money", an assertion that could hinder attempts to mend fences between the two countries after years of estrangement. Ya'alon said that the Turkish government wasn't pulling their weight in the fight against "terrorism".

"Now it's up to Turkey, the Turkish government, the Turkish leadership, to decide whether they want to be part of any kind of cooperation in fighting terrorism. This is not the case so far," Ya'alon told reporters in Athens after meeting with his Greek counterpart, Panos Kammenos, on Tuesday (26 January).

"As you probably know, Islamic State (Daesh) enjoyed Turkish money for oil for a very, very long period of time, I hope that it will be ended. Turkey allowed jihadists to move from Europe to Syria and Iraq and back home as part of the Daesh terror infrastructure in Europe, I hope it is going to be ended. Turkey still hosts the Hamas external terrorist quarters in Istanbul. If all those phenomena are going to be ended, Turkey will be able to rehabilitate the relationship with Israel."

Turkey has denied permitting oil smuggling by the Islamist militant group, which holds swathes of territory in Syria and Iraq. The United States in December 2015 rejected Russian allegations that the Turkish government and President Tayyip Erdogan's family were in league with IS to smuggle oil. However, US State Department spokesman Mark Toner said that Isis was selling oil to middlemen who in turn were involved in smuggling the oil across the frontier to Turkey.

Efforts by Israel and Turkey to normalise ties hit a setback earlier in January when Turkish Foreign Minister Mevlut Cavusoglu said there was no agreement on Ankara's demands for compensation for the deaths of 10 Turkish activists on an aid ship in 2010 or for an end to Israel's blockade of Gaza.

Senior Israeli and Turkish officials met in December 2015 to try to repair relations, raising hopes of progress in negotiations to import Israeli natural gas, particularly since Turkey's relationship with Russia has worsened over the Syria conflict.