Turkey has said it will challenge Israel's blockade of Gaza at the International Court of Justice (ICJ).
It is the latest sign of strain between the countries since last year's Israeli action against ships heading for Gaza, in which nine Turks were killed.
Foreign Minister Ahmed Davutoglu said Turkey did not accept the findings of a UN report which said Israel's blockade of Gaza was a legal security measure.
His comments came a day after Turkey expelled the Israeli ambassador.
It also halted military co-operation with Israel.
Report 'not endorsed'
Speaking on state-run Turkish TV, Mr Davutoglu said the UN report, prepared by former New Zealand Prime Minister Geoffrey Palmer and former Colombian President Alvaro Uribe, had not been endorsed by the UN and was therefore not binding.
"What is binding is the ICJ," he went on. "This is what we are saying: let the ICJ decide."
Some activists on the Mavi Marmara attacked commandos as they landed on the ship
Turkey, he added, would start the necessary legal procedures in the coming week.
Based in The Hague, the ICJ is a permanent UN court set up to rule on state-to-state disputes.
Israeli Deputy Foreign Minister Danny Ayalon insisted his country had nothing to apologise for and had done all it could to avoid a crisis with Turkey.
He said the Turks seemed to want to raise tensions with Israel for its own reasons.
"They were not ready for a compromise and kept raising the threshold," Mr Ayalon said on Israeli TV.
"I think we need to say to the Turks: as far as we are concerned, this saga is behind us. Now we need to co-operate. Lack of co-operation harms not only us, but Turkey as well."
The US state department has said Washington hopes Turkey and Israel "will continue to look for opportunities to improve their longstanding relationship".
'Unreasonable' force
The nine pro-Palestinian activists who died were on board the Turkish-flagged ship, Mavi Marmara, when it was intercepted by the Israeli navy in international waters as it sailed towards Gaza's coast on 31 May 2010.
At the time, the Israeli military said its commandos fired live rounds only after being attacked with clubs, knives and guns. But activists on board said the commandos started shooting as soon as they hit the deck.
The UN inquiry found Israel's naval blockade had been "imposed as a legitimate security measure in order to prevent weapons from entering Gaza by sea and its implementation complied with the requirements of international law".
It said Israeli troops had faced "significant, organised and violent resistance from a group of passengers" and were therefore required to use force for their own protection.
But it also said Israel's decision to board the vessels "with such substantial force at a great distance from the blockade zone and with no final warning immediately prior to the boarding was excessive and unreasonable".
The report noted "forensic evidence showing that most of the deceased were shot multiple times, including in the back, or at close range".
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