while i agree with stephan walt's basic point that israeli policies are harming its own interest on the international stage, it's not really the occupation that's causing their current headaches. the occupation has been around for decades. israel was an occupying power when it built its alliance with turkey. occupation alone can't explain the recent tension in that relationship.
it's gaza, not the occupation, that is causing the current problems with turkey (and other countries as well). operation cast lead was a strategic debacle for israel. the military campaign itself (with its one hundred-to-one kill ratio), the spotlight it cast on the blockade of gaza (which prior to the military operation hadn't gotten much international attention at all) and the release of the goldstone report are what is causing the current problems. the operation and its fallout also seemed to do what decades of occupation alone never did, caused some of the people who otherwise gave israel the benefit of the doubt to question that assumption. that may not seem like much, but israel has benefited enormously from the assumption of good will for most of its existence.
israel's current internal politics prevents that country from having a serious assessment of whether the gaza war was worth it. the international backlash is making israel more defensive about what it did, which means it will continue to support its gaza policies, even as the rest of the world is seeing it as increasingly indefensible. unless that dynamic is broken, i don't see how anything can get better, whether it be relations with turkey, the situation in gaza, or the peace process overall.
