Davos, Switzerland ? In the 12 years I’ve been attending Davos, I’ve never seen anything like it.

An extraordinary, emotional debate over Gaza took place between Turkish Prime Minister Recep Tayyip Erdogan and Israeli President Shimon Peres at the World Economic Forum on Thursday. It ended with Erdogan storming off stage and saying he would never return to Davos, after the moderator refused him more time to respond.

What made the exchange even more astounding was that Turkey has deep relations with Israel — it is her closest Muslim ally. Moreover, Peres is known for his efforts at peacemaking and Erdogan had been mediating talks between Israel and Syria.

The drama between these two peacemakers laid bare the white-hot tensions unleashed by Israel’s invasion of Gaza. Their confrontation also showed how difficult it will be for the Obama administration to renew any peace process.

It was clear that the Turkish leader took the Dec. 27 Gaza invasion very personally. On Dec. 23, Israeli Prime Minister Ehud Olmert had visited Ankara for the fifth round of indirect talks with Syria.

“The goal was to see if we could move to the next phase, direct talks,” Erdogan told the audience. He said he had called Syrian President Bashar al-Assad during the Olmert visit. He had also suggested that Turkey try to mediate with Hamas for the release of kidnapped Israeli soldier Gilad Shalit.

“He (Olmert) said he would respond the next day, but we got no answer. Four days later, Israel was in Gaza,” Erdogan said. The Turkish leader was humiliated. Members of his party accused him of collusion with Israel, assuming Olmert had warned him of the coming invasion.

Erdogan blames the continuing violence in Gaza on the fact that the strip is still effectively occupied by Israel, which controls airspace, sea space and territorial borders. And he was furious about Israel’s “disproportionate response” to Hamas rocket attacks that left hundreds of innocent Palestinian women and children dead, and Gaza’s infrastructure shattered.

“Hamas are not the only people in Gaza,” Erdogan shouted, his voice rising, as he decried the difficulty of getting humanitarian aid through Israeli checkpoints into Gaza. “We should not be judging anyone by race or religion if they are in distress.”

But Peres was equally furious at Erdogan’s inference that his, and Israel’s, reputations were sullied by the Gaza carnage. He said Hamas had fired 5,500 rockets and 4,000 mortars toward Israel over the last five years.

Peres feels the world fails to understand the psychological and economic trauma of Hamas rocket fire on cities, which kill only a few, but totally disrupt normal life.

“One million people slept in shelters. What would you do?” he demanded, blaming Iran for supplying the rockets. “People who never demonstrated against thousands of missiles (fired against Israeli civilians) are demonstrating now.”

Peres also resents the fact that past Israeli peace efforts have been forgotten, including, in his view, the 2005 pullout from Gaza. His own prime ministership was destroyed in 1996 when Palestinian bus bombs murdered dozens of civilians and undercut Israeli faith in the peace process. As a consequence, the dovish Peres was defeated by the hawkish Benjamin Netanyahu.

The Israeli president insists the Gaza invasion was forced on Israel by Hamas. “For us, victory is peace, not war,” he said.

But Peres was not apologetic about striking back at those who rocket Israel. “Hezbollah has learned a lesson,” he said, a reference to Israel’s 2006 bombing of Lebanon; Hezbollah hasn’t fired rockets at Israel since then. “We hope Hamas will learn a lesson.”

So what exactly is the lesson of this Davos psychodrama for the future of peace talks?

Obama’s new peace emissary, former Sen. George Mitchell, will find an Israeli public that believes that Hamas deserved to be punished, never mind the staggering cost to innocent Palestinians. Most Israelis are convinced that if they give back more land they will get more missiles on their heads, so they will probably return Netanyahu to power in this month’s elections.

Mitchell will also find an Arab, and Turkish, world that shares Erdogan’s anger and was horrified by TV scenes of dying Palestinian children, which decimated any remaining belief in the peace process.

The good news is that moderate Arab leaders want to give peace talks one last shot. And Erdogan told journalists that, although Turkish mediation is now “shelved,” Turkey would be willing to resume it if it was requested by the parties.

But Mitchell, who visits the Middle East next week, will have to overcome a boiling anger that runs deep in Israel, Turkey and Arab countries. That rage was in full view on stage in Davos last week.