Israel's Benjamin Netanyahu confirmed apologising to Turkey on Friday for the deadly 2010 flotilla raid and announced a full resumption of diplomatic ties as well as compensation for the families of those killed, his office said.

In a phone call between Netanyahu and Turkish Prime Minister Recep Tayyip Erdogan, "the two agreed to normalisation between the countries, including returning ambassadors and cancelling legal proceedings against IDF (Israeli army) soldiers," it said.

"Prime Minister Netanyahu apologised to the Turkish people over every mistake that could have led to the loss of lives and agreed to complete the agreeement with compensation."