In a pre-dawn raid Wednesday, Israeli naval commandos boarded an Antiguan flagged cargo ship 100 miles off the Israeli coast and discovered a stash of concealed weapons and ammunition.
According to the Israeli military spokesman's unit, the weapons were hidden within the ship's commercial cargo. The vessel, which has yet to be named, was towed into the Israeli port of Ashdod for closer inspection.
Defence Minister Ehud Barak congratulated the navy saying, "This is another success in the endless struggle against attempts to smuggle weapons and military equipment whose goal is to strengthen terrorist elements who threaten the security of Israel."
Unnamed Israeli defence officials claimed the weapons shipment consisted of rockets and anti-tank weapons bound for Hezbollah, the Shiite Islamic organization in Lebanon.
The same officials believed the shipment was sent by Iran, and that the ship stopped in both Yemen and Sudan before passing through the Suez Canal.
Israel has long accused Iran of supporting both Hezbollah and Hamas with funding and weapons.
In 2006 Israel fought a war with Hezbollah guerrillas in South Lebanon during which hundreds of rockets were fired at Israeli towns and cities.
Israel's northern border has been quiet since then, but intelligence officials have warned that Hezbollah has been rebuilding and expanding its arsenal of rockets with Iranian and Syrian help.
In January 2002 Israeli forces intercepted another arms ship in the Red Sea. The Karine A was loaded with weaponry bound for Palestinian militants.
On Tuesday Israeli military intelligence warned politicians that Hamas had recently test fired a rocket capable of reaching Tel Aviv from Gaza. They believe it was one of a batch recently smuggled in from Iran.