The accord, which will be formally signed Tuesday, will pave the way for the restoration of bilateral relations more than six years after Israeli commandos stormed a Gaza-bound Turkish aid flotilla in international waters, killing nine Turkish activists and injuring another 30, one of whom succumbed to his injuries nearly four years later.
"Under the deal, the sea blockade of Gaza will remain in place," Netanyahu was quoted as saying by Israeli state media. "This is a sensitive security issue and is not up for negotiation.
"The Gaza security blockade will remain in place … so as to prevent Hamas [which has governed the strip since 2007] from bolstering its military capacities," he said.
He added, however, that the expected deal with Turkey would allow the Gaza Strip’s war-battered water and electricity infrastructure to be rebuilt.
"Water shortages make life harder for those living in the Gaza Strip," Netanyahu said. "Solving this problem will be good for Israel."
The deal, he added, "will also protect [Israeli] military personnel now and in the future by ensuring that Turkey doesn’t file lawsuits against them" for their roles in the 2010 Mavi Marmara incident.
Netanyahu went on to assert that Turkey and Israel were both "strong countries in the region", saying: "The suspension of [Turkey-Israel] ties has hindered cooperation between us."
In the aftermath of the attack, Turkey demanded a formal apology from Israel, compensation for the families of those killed, and the lifting of Israel’s Gaza blockade.
In 2013, Netanyahu voiced his regret for the attack.
On Monday, months of talks between the two countries finally bore fruit, with Turkey announcing that a deal would be signed the following day to normalize relations with Israel.
According to the deal, Israel will pay a total of $20 million in compensation to the families of the Mavi Marmara victims.
Speaking to Anadolu Agency, Masud Ghnaim, an Arab member of the Knesset said the deal would have "positive aspects for the Palestinian people, especially to alleviate the suffering of our people in the Gaza Strip.
"The agreement is in the interests of the Palestinian people and a cause that Turkey has worked for since the beginning -- the lifting of the Israeli siege on Gaza," Ghnaim said.
"It is true the agreement does not speak explicitly about lifting the blockade, but there are clear and specific items on easing the siege," he added.
For example, he noted, "the agreement allows the passage of goods into Gaza and the establishment of a power plant and desalination plant and the construction of a hospital in Gaza".
What’s more, Ghnaim said, Israel’s promise to pay compensation to the families of the victims of the Mavi Marmara attack "is a clear and explicit recognition by Israel [of its] responsibility for the attack".
UN Secretary-General Ban Ki-moon, for his part, at a meeting with Israeli President Reuven Rivlin in Jerusalem, also welcomed news of the deal, describing it as an "important signal for the stability of the region".
In Washington, the White House hailed the development as an “important milestone” and “important security and economic benefits for both countries and the world.”