In a telephone conversation with his Turkish counterpart Recep Tayyip Erdogan, Benjamin Netanyahu agreed to compensate the families of the victims.
Mr Netanyahu had previously only expressed regret for the nine deaths.
The stance significantly damaged relations between the two US allies.
The telephone conversation took place at the end of a visit to Israel and the West Bank by US President Barack Obama.
Before departing Tel Aviv airport for Jordan on Friday afternoon, Mr Obama revealed that Mr Netanyahu and Mr Erdogan had spoken.
"The United States deeply values our close partnerships with both Turkey and Israel, and we attach great importance to the restoration of positive relations between them in order to advance regional peace and security," he said in a statement.
US officials told reporters that Mr Netanyahu had apologised for the flotilla incident and acknowledged "operational mistakes".
Mr Erdogan had accepted the apology, they added. In the past, he has always given two conditions for restoring bilateral relations with Israel - an apology and compensation for the victims' families.
Source: BBC News
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