The Defense Ministry has ordered Israel Aerospace Industries and Elbit Systems Ltd. to cancel the sale of advanced intelligence equipment to Turkey, Channel 10 News reported on Thursday.

According to the report the canceled deal, which was signed in 2009 and is worth $140 million, was for the sale of an advanced infrared camera and associated equipment.

The reason for the cancelation, according to the report, is the diplomatic row between Israel and Turkey. All defense-related exports by Israeli companies require the approval of the Ministry of Defense, the report noted, but the cool relations between the two countries have caused the Ministry to become concerned that the systems might fall into hands other than those of the Turkish army.

The deterioration in the relationship between the two countries began when Turkey demanded that Israel apologize for the deaths of nine Turkish nationals onboard the Mavi Marmara in May of 2010. The Turkish citizens were killed when Israeli soldiers who boarded the Gaza-bound ship were forced to open fire after being attacked by the activists on board with clubs and knives.

Prime Minister Binyamin Netanyahu refused to apologize for the incident, and Turkey responded by downgrading its diplomatic ties with Israel.

Turkish Prime Minister Recep Tayyip Erdogan further deteriorated the tense situation when he chose to verbally attack Israel on several occasions.

Channel 2 News quoted the Defense Ministry as saying in response to the canceled deal, “In general, the Ministry of Defense does not list the general considerations and information that underlie the decision-making policy on defense exports. The Ministry of Defense conducts an assessment of the situation with all relevant bodies, and decisions are made on a professional basis and in accordance with security and political considerations.”

Elbit Systems published a statement in response to the cancelation on Thursday, in which it said that it “has turned to the Israeli Ministry of Defense regarding compensation with respect to potential liability the Company may incur as a result of the non-renewal of the export authorizations, and the Director General of the Ministry of Defense has decided to enter into discussions immediately with the Company in order to endeavor to reach an agreed upon arrangement regarding this issue.”

“At the present time, there is not an estimate of the amount of the damages that may result from the non-renewal of the export authorizations. Such damages may have a material impact on the Company’s financial results,” Elbit Systems said.