Israel and Turkish diplomatic, economic, and military ties are important points to understand in correlation with what is going on in the Middle East big picture. Turkey has historically holds a "mildly laid back" presence towards Israel compared to other countries in the area. But as we go through the last 70 years of history, where the rifts stemmed from becomes clear. And these are rifts that are still visible today.
1949- Turkey was the first Muslim majority country to recognize the State of Israel, since then they have shared allies in the west and been relatively secular countries in a Middle East dominated by religious extremism
1900's/early 2000's- This is considered the peak period of the relationship, tourism was booming, there was cross-border military cooperation, and trade was healthy between the two countries
Early 2000's- Recep Tayyip Erdogan begins to rise to power with his AKP Party (Justice and Development Party), towards the beginning Erdogan condemned anti-semitism and visited Israel, Turkey was trying to broker peace between Israel/Syria and Israel/Palestine
2009- Relations began to go south after Israel launched Operation Cast Lead, the relationship has never fully recovered
2010- Israeli commandos attacked the MV Mavi Marmara when it tried to break through the Gaza blockade, 10 Turkish citizens were killed, Turkish withdrew ambassador and accused Israel of a "bloody massacre", this also stopped all joint military exercises
2016- Things were patched up when Israel agreed to compensate for the 2010 Marmara event
We all knew the official recognition of Jerusalem as the capital was going to stir the pot...and the pots a-stirrin. Erdogan specifically, is not at all happy with this decision. He has said that Turkey will work to fight this unjust decision and is even bringing the case to the UN Security Council. He believes that the world should recognize East Jerusalem as the "Palestinian Capital".
On another note, Erdogan has been extremely critical and outspoken against the clashes on the Israel/Gaza border. Since the start, he has expelled the Israeli ambassador and withdrawn the Turkish envoy from Israel. This is a very clear statement of discontent with Israel and an even clearer statement of support in favor of the Palestinians.
While there is a war of words between the two countries, it's believed that neither side wants escalation. For now, the Turks will continue to support the Palestinians in whatever way they can (without getting involved militarily). And the Israelis will do what they do best...protect their people with force when necessary.