By Irit Rosenblum and Zohar Blumenkrantz, Haaretz Correspondent

Israeli tourism to Turkey took a nosedive after Thursday’s incident at the Davos World Economic Conference, where Turkish Prime Minister Recep Tayyip Erdogan stormed off the stage after verbally sparring with President Shimon Peres over last month’s fighting in the Gaza Strip.

Tourism officials are reporting massive cancelations of Turkish vacations booked for the Pesach holiday period and for this summer.

Turkey is the single most popular foreign destination for Israeli tourists, representing 13% of all departures and generating an estimated $300 million in annual revenues. About 70% of these travelers head for the resorts of Antalya. Many of the tourism packages are booked through Israeli workplaces. Israel Airports Authority figures put Turkey as Israelis’ second-favorite destination for 2008 after the United States, with well over half a million taking the short hop to beaches and cheap shopping.

“We have suspended all the negotiations we had been conducting with hotels for the upcoming spring and summer in Turkey, until we feel that it is comfortable and safe there and that we are wanted in that country. Travelers are being diverted to Greece and Cyprus,” Arkia Israel Airlines CEO Gad Tepper said this weekend. “Workers’ committees at companies and large public institutions are canceling their activities in Turkey, and we have cut our flights to Antalya to a minimum,” Tepper added.

Eyal Kashdan, CEO of the Flying Carpet travel agency, said reservations are down by 50% on last January.

Ronen Karso of Issta Travel Lines said the workers’ committee of the Israel Electric Corporation informed the company that they will not be booking trips to Turkey this year, adding that other unions have done likewise.

Yossi Fattal, head of the Israel Tourist and Travel Agents Association, said that the travelers’ boycott is unprecedented in Israel. He believes, however, that the impact will not be as severe as it would now appear. “The Israeli memory isn’t very long – half a year is like an ice age and the memory will fade.”