Turkish Prime Minister Recep Tayyip Erdogan on Tuesday said that the presence of Turkish Navy ships in the eastern Mediterranean would increase as part of Turkey's measures against Israel, and held a meeting with Chief of General Staff Gen. Necdet Ozel to discuss methods for protecting maritime navigation in the Mediterranean, according to Turkish media.

Erdogan called Israel the "spoiled child of the region," and said that Ankara intended to ramp up the presence of the Turkish fleet in waters near Israel and Cyprus. “The eastern Mediterranean Sea is not a region unfamiliar to us,” Erdogan told reporters on Tuesday. He said Turkish forces stationed at naval bases in Aksaz and İskenderun could patrol regional waters and escort civilian ships in the Mediterranean. "Certainly, our ships will appear more frequently in these waters,” Erdogan added.

The Turkish plans for the Mediterranean involve increasing the number of frigate ships on patrol from two to four, and the number of missile boats from one to three.

The Turkish prime minister's latest remarks come as part of a growing barrage of Turkish criticism, coupled with diplomatic sanctions against Israel, following the publication of the Palmer report, an investigation into the events surrounding the 2010 raid on the Gaza-bound flotilla. In that incident, Israeli commandos boarded the Turkish Mavi Marmara vessel, and nine Turkish nationals were killed in the ensuing conflict. The report was authored by a U.N. panel led by former New Zealand Prime Minister Sir Geoffrey Palmer.

The Palmer report found Israel's naval blockage of the Gaza Strip to be legal but stated that Israeli commandos had used excessive force aboard the ship. It also criticized Turkey for its role in the raid. Nevertheless, Erdogan called the raid on the Mavi Marmara an example “of savagery and state terror.” He said Turkey was determined to protect the rights of its citizens and would continue to demand that Israel apologize for the raid, which Jerusalem has thus far refused to do.

Following the report's publication last week, Ankara downgraded diplomatic ties with Israel to the second secretary level and also said that his country was suspending defense trade ties with Israel. Israeli diplomats have been ordered to leave Turkey by Wednesday.

Amid conflicting reports, the head of Policy and Political-Military Affairs at the Defense Ministry, Maj. Gen. (res.) Amos Gilad, issued a statement clarifying that Israel's military attache in Turkey, Col. Moshe Levi, was not on the list of the expelled diplomats.

Turkey is also looking to punish Cyprus over the gas and oil agreements signed between Israel and Cyprus last year.

The bid to increase Turkish maritime presence is part of an overall plan to restore Turkish control over the Mediterranean –as it was in the heyday of the Ottoman Empire, according to reports Tuesday in the Turkish daily newspaper Sabah and other news agencies.

Turkey is reportedly planning to increase its presence not only in the Mediterranean Sea but also in the Aegean, Black, Adriatic and Red seas, and even in the Indian Ocean. The maritime expansion project has been code named "Barbarossa," a reference to legendary Ottoman admiral "Barbarossa" Hayreddin Pasha, who played a major role in expanding the Ottoman Empire during the time of the Sultan Suleiman "the Magnificent" in the mid-16th century.

Meanwhile, Erdogan continued to lash out against Israel on Tuesday, announcing that all economic ties with Israel, as well as defense industry trade, would be suspended.

"Trade ties, military ties, defense industry ties, we are completely suspending them," Erdogan said. "This process will be followed by different measures," he warned. A few hours later, a spokesman in his office clarified the statement, stating that only defense trade would be affected.

The Turkish prime minister did not elaborate on what those "different measures" might entail, but did add that he plans to visit the Gaza Strip, a move that Israeli officials have said would be a diplomatic misstep that could threaten Turkey's ties with both the U.S. and the Fatah-aligned Palestinian Authority.

Transportation Minister Yisrael Katz responded on Tuesday to Ankara's increasingly stern criticism and its sanctions against Israel, saying, "The prime minister was correct in his decision to refuse to apologize to the Turks. It is the Turks who need to apologize to us."

Katz's statements came after a meeting with Prime Minister Benjamin Netanyahu, where relations with Turkey were part of the discussion's agenda.

Katz also referred to the events on the Mavi Marmara, saying, "Israel Defense Forces soldiers were sent on a mission by the state of Israel to prevent a breach of the naval blockade, through which weapons are supplied by Iran to terror groups in Gaza with the goal of harming Israeli citizens."

Katz added that the U.N. recognized the legality of the naval blockade on the Gaza Strip. "As such, it is the Turks who need to apologize, as they were aware of the potential violence aboard the Marmara ship and did not prevent it," Katz said.

Meanwhile, Defense Minister Ehud Barak urged both sides to stay calm. "Israel and Turkey are the two most powerful and, in some senses, the most important, nations today in the Middle East," Barak said. "We have disagreements," Barak continued. "Yet even in disputes, it's important that both sides act rationally and not out of emotion. It is in everyone's best interest to rectify the situation and bring about stability to the region."

Homefront Defense Minister Matan Vilnai reiterated Barak's sentiments.

The U.S. expressed concern Tuesday over the frayed ties between its allies Israel and Turkey, urging them to "de-escalate" their dispute.

State Department Spokesperson Victoria Nuland said that the U.S. is working to ease tensions, and has held discussions with the Israelis about it in recent days.

"Our emphasis with both the government of Turkey and the government of Israel is to hope that we can de-escalate, we can defuse, and we can get them back to talking about improving their relationship," she said.

"There are freedom of navigation issues for both Turkey and for Israel. But we want to avoid future confrontations, and we want both of these strong allies of the United States to get back to a place where they have a good working relationship with each other," she added.

Industry, Trade and Labor Minister Shalom Simhon addressed Erdogan's announcement that trade relations between Turkey and Israel would be suspended, saying, "I hope that trade between the two countries serves as a fulcrum during these stormy times, and I am sure it will prove to be an impetus and a bridge to build relations in the future."

Both countries stand to lose financially from the diplomatic rift. In 2010, Israeli exports to Turkey stood at $1.3 billion, an increase of 20 percent from the previous year. During the first half of 2011, Israeli exports to Turkey amounted to $858 million, representing a further increase of 23% over the first half of 2010. Annual Israeli exports to Turkey amount to more than $1.7 billion, with Turkey being Israel's fifth-largest European trading partner after Germany, Britain, Belgium and the Netherlands. Israel's main exports to Turkey include chemical products (53%), plastic products (13%), high-tech products (12%) and metals (11%).

Meanwhile, Turkish imports to Israel in 2010 stood at $1.8 billion, marking a rise of 30% from 2009. During the first half of 2011 $1.1 billion in exports were recorded, an increase of 14% from 2010's first half. In annual terms, Turkish imports to Israel this year are expected to reach $2.2 billion.

In related financial news, a senior Syrian official in Damascus said Tuesday that Syria has frozen all economic agreements with Turkey. The official indicated that Syria is disappointed in Turkey's support of economic sanctions imposed on Syria due to Syrian President Bashar Assad's months-long bloody suppression of a popular rebellion, including those of oil exports.

Iran, formerly a staunch ally of Turkey, also recently criticized Ankara in response to its approval of a new NATO radar system to be installed on Turkish territory.