Turkey and Israel have agreed to restore full diplomatic relations and will return ambassadors to each other’s countries following a gradual improvement in relations.

The announcement on Wednesday followed a conversation between Israeli Prime Minister Yair Lapid and Turkish Prime Minister Recep Tayyip Erdogan. It comes four years after the two countries expelled ambassadors over the killing of 60 Palestinians by Israeli forces during protests on the Gaza border against the opening of the United States Embassy in Jerusalem.

“It was decided to once again upgrade the level of the relations between the two countries to that of full diplomatic ties and to return ambassadors and consuls general,” a statement from Lapid’s office said.

“Upgrading relations will contribute to deepening ties between the two peoples, expanding economic, trade, and cultural ties, and strengthening regional stability,” it added.

Turkish Foreign Minister Mevlut Cavusoglu told reporters in Ankara that the appointment of ambassadors was “one of the steps for the normalisation of ties”. “Such a positive step came from Israel, and as a result of these efforts, and as Turkey, we also decided to appoint an ambassador to Israel, to Tel Aviv,” he said.

Cavusoglu added that the move did not mean that Turkey would be abandoning the Palestinian cause.

“We have always said we will continue to defend the rights of Palestine, Jerusalem and Gaza. It’s important that our messages are conveyed at the ambassadorial level in Tel Aviv,” he said.

The thaw in ties comes after more than 10 years of tensions. A visit to Turkey by Israeli President Isaac Herzog in March, followed by visits by both foreign ministers, helped warm relations.

Al Jazeera’s Resul Sardar, reporting from Istanbul, said economic and security factors were at play.

“In one year, there will be a presidential election here in Turkey. But with inflation at more than 70 percent, Ankara wants to attract investment from regional countries. There are security challenges, too, in Syria and the eastern Mediterranean basin. Turkey sees Israel as a strong player, and for Israel, Turkey is seen as a balancing power in a region threatened by Iran.”

But even with the full restoration of diplomatic ties, the Palestinian issue was likely to remain a “contentious difference” between the two countries, he added.

The move, which comes as Israel has sought to improve ties with regional powers, was agreed upon two years after the so-called Abraham Accords which saw relations normalised between Israel, Bahrain, the United Arab Emirates (UAE) and Morocco.

Turkey also launched a charm offensive in 2020 to repair ties with estranged rivals, making overtures to Egypt, the UAE and Saudi Arabia. Efforts with Cairo have so far yielded little progress, but officials have said normalisation work with Riyadh and Abu Dhabi are going well.