However, a senior Israeli official who declined to be named said that Israel, having indicated last year that it was prepared to indemnify victims without accepting blame, had not renewed its offer.
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Ramazan Ariturk, one of several lawyers representing 465 victims and victims' relatives, said that the Israeli government had made a proposal to him through an intermediary foreign ambassador in Ankara just over one month ago.
He said the money would have been paid to a Jewish foundation in Turkey for distribution, and been followed by a statement of "regret" for the raid by the Israeli government.
"I told the ambassador I did not think the offer was appropriate or moral and also discussed the issue with the victims and their friends and they also stated that they could not accept this," Ariturk said.
The Turkish Foreign Ministry agreed with his decision, saying Israel should have contacted it directly, he said.
Ariturk declined to disclose the nationality of the ambassador or reveal the name of the Jewish foundation to which the payment would have been made.
The Turkish Foreign Ministry could not be reached for immediate comment, while Mark Regev, spokesman for Israeli Prime Minister Benjamin Netanyahu, declined to comment.
Turkey expelled Israel's ambassador and froze all military cooperation with its former ally after a UN report into the incident last September largely exonerated the Jewish state.
Turkey has demanded a formal apology from Israel alongside compensation for victims and the families of the dead, but Netanyahu has only voiced "regret".
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