Details of the report were leaked to the New York Times on Thursday condemning the raid on the ship that sought to break a naval blockade of Gaza. But the UN said Israel was within its rights to impose the blockade.
Turkey also said it would suspend all military agreements between the countries.
Turkey has in vain demanded an apology from Israel for the deadly raid in May 2010.
Ankara and the Palestinian National Authority in June signed a pact that bolsters Turkey's support for the establishment of a Palestinian state and increases investment in water resources and agriculture. and increase cooperation in culture, education, health and science.
The agreement was endorsed a week after nine people, mostly Turkish activists, died when Israeli navy commandos stormed a ship trying to break Israel's blockade that was imposed in June 2007.
Israel claims the blockade, imposed after the Islamist Hamas movement seized control of the Gaza Strip, is to counter indiscriminate rocket attacks on Israeli cities by Palestinian militants. Opponents says it unfairly punishes Gaza's 1.7 million people by restricting their access to supplies like food and medicine.
The UN report apparently had the opposite effect of its intention to heal relations between Turkey and Israel.
"Turkey and Israel should resume full diplomatic relations, repairing their relationship in the interests of stability in the Middle East and international peace and security," it said, according to its text published by the New York Times.