Israel rejected on Sunday a proposal by UN Secretary-General Ban ki-Moon for an international investigation into its deadly raid on a Gaza-bound aid ship and said it had the right to launch its own inquiry.

"We are rejecting an international commission. We are discussing with the Obama administration a way in which our inquiry will take place," Michael Oren, Israel's ambassador to Washington, said on the US TV programme "Fox News Sunday".

The UN chief had suggested establishing a panel that would be headed by former New Zealand prime minister Geoffrey Palmer

and include representatives from Turkey, Israel and the United States, an Israeli official said earlier in Jerusalem.

Netanyahu discussed the proposal for a multinational panel with Ban in a telephone call on Saturday but told cabinet

ministers from his right-wing Likud party on Sunday that Israel was exploring other options, political sources said.

Nine Turks were killed on May 31 in the Israeli commando raid on the Mavi Marmara, part of a six-vessel convoy that set out to challenge an Israeli-led blockade of the Gaza Strip.

Israel has said its troops used lethal force in self-defence after they were set upon by pro-Palestinian activists wielding

clubs and knives.

Israeli leaders have spoken publicly about setting up an internal investigation with foreign observers into the interception of the Turkish-flagged ship off the coast of Gaza, an enclave run by Hamas Islamists who oppose Western-backed

Palestinian President Mahmoud Abbas's peace efforts with Israel.

"Israel is a democratic nation. Israel has the ability and the right to investigate itself, not to be investigated by any

international board," Oren said.

Turkish Foreign Minister Ahmet Davutoglu, speaking on CNN, said Ankara would insist on an independent commission and

suggested that Israel's rejection of an international inquiry showed it wanted to cover up the facts of the raid.

"We want to know the facts. If Israel rejects this, it means it is also another proof of their guilt. They are not

self-confident to face the facts," he said.

Turkey's relations with Israel, once a close ally, have soured badly since the deadly raid.

- Reuters