Freedom Flotilla confirms in a press release that the military has boarded and that they "lost all communication" with the ship Handala.
The ship was expected to arrive in Gaza on Sunday morning, and would thus defy Israel's blockade.
Hours before the ship was boarded on Saturday, it was 19.4 miles from Gaza, closer than its predecessor Madleen, which was stopped in June with Greta Thunberg in the crew.
Israel's fleet then announced that they would also prevent Handala from reaching Gaza.
Israel's army maintains the legal, maritime security blockade against the Gaza Strip and is prepared for a variety of different scenarios, said a spokesperson for the military.
Handala has 19 activists and two journalists from different countries on board. The ship left the port in Sicily on July 13 with the aim of breaking Israel's blockade of Gaza and delivering supplies to its population. The crew has threatened with a hunger strike if Israel boards the ship.