Israel Navy Attacks International Boat in Gaza, page 1

The blockade is completely legal since Israel is in an armed conflict with Hamas which is the governing body of Gaza. Imposed economic hardship on civilian populations is not a singular occurrence in the world today. Witness, for example, the economic difficulties for civilian populations as the result of sanctions that have been imposed on other problematic regimes, such as those in North Korea, Syria, Cuba, and Iraq as a means of applying economic pressure on them and during the course of which typically goods that are not vital are not transferred to the countries, including obviously items that would help them militarily. A naval blockade implementing sanctions in fact is a recognized and accepted military tool. For example, a blockade called Operation Sharp Guard was imposed for three years in the mid-1990's by NATO and Western European Union naval forces on the Federal Republic of Yugoslavia, during which they queried some 74,000 vessels and boarded and inspected at sea about 6,000 of them, while directing for inspection to port more than 1,400 ships. Coalition naval forces engaged in the maritime interception operation to enforce the Iraq embargo had by the year 2000 challenged almost 30,000 merchant vessels, boarded about 13,000 ships, and directed to coalition ports for further investigation some 750. A blockade, designated as a "quarantine" was also imposed in 1962 by the United States against Cuba, and during the first year of the mid-twentieth century Algerian crisis French naval vessels on the high seas visited and searched almost 5,000 ships that were suspected of transporting war materiel to Algeria. Allied Powers imposed blockades against Axis and Central powers during the two World Wars as well. During World War One, British naval vessels, for instance, were credited with intercepting and detaining thousands of merchant ships suspected of transporting cargo bound for the enemy, and the Allied naval blockade of Germany was widely considered to have been responsible for the deaths due to starvation of around three-quarters of a million German civilians.
The actions of the Israel navy against the flotilla on the high seas were conducted pursuant to long-standing principles of the law of armed conflict at sea. These principles allow Israel to impose on the high seas a naval blockade of territory controlled by the enemy in order to prevent the entrance of ships, without regard to the type of cargo that the ships are carrying, to prohibit commerce with the enemy, even if the cargo is bound for civilians, and to search on the high seas for contraband which consists of goods destined for enemy controlled territory and that "may be susceptible for use in armed conflict." Flotilla vessels therefore could be visited and searched on the high seas if they were reasonably suspected of breaching or attempting to breach the blockade or of carrying contraband, but they could also be visited and searched on the high seas if they were reasonably suspected of violating regulations set up by Israel within the immediate naval operations area or of engaging in belligerent acts on the enemy's behalf or of making an effective contribution to the military action of the enemy; Israel could exercise control on the high seas over flotilla vessels located in the immediate vicinity of naval operations and ships that did not comply with orders given them by Israel in this regard could be presumed to have hostile intent or enemy character and therefore could be treated as if they were enemy ships; flotilla vessels that were reasonably believed to be breaching or that were attempting to breach the blockade or that were carrying contraband, or that were violating regulations established by Israel within the immediate naval operations area or that were engaged in belligerent acts on the enemy's behalf or that were making an effective contribution to the military action of the enemy, could be captured on the high seas; and flotilla vessels could be attacked on the high seas, like military objectives, if they engaged in belligerent acts on the enemy's behalf or made an effective contribution to the military action of the enemy, or if they were reasonably believed to be breaching the blockade or to be carrying contraband, after they had been given prior warning and when they clearly and intentionally refused to stop or resisted visit, search or capture.

According to the laws of armed conflict at sea:

The following activities may render merchant vessels military objectives:

(a) engaging in belligerent acts on behalf of the enemy, e.g., laying mines, minesweeping, cutting undersea cables and pipelines, engaging in visit and search of neutral merchant vessels or attacking other merchant vessels;

(b) acting as an auxiliary to an enemy's armed forces, e.g., carrying troops or replenishing warships;

(c) being incorporated into or assisting the enemy's intelligence gathering system, e.g., engaging in reconnaissance, early warning, surveillance, or command, control and communications missions;

(d) sailing under convoy of enemy warships or military aircraft;

(e) refusing an order to stop or actively resisting visit, search or capture;

(f) being armed to an extent that they could inflict damage to a warship; this excludes light individual weapons for the defense of personnel, e.g., against pirates, and purely deflective systems such as chaff; or

(g) otherwise making an effective contribution to military action, e.g., carrying military materials.

Thus, you can see that the aid flotilla must either allow inspection and/or diversion or may be treated as an enemy vessel.