Here is the wiki entry on the USS Liberty Incident.
The USS Liberty incident was an attack on a neutral U.S. Navy technical research ship, USS Liberty, by Israeli jet fighter planes and motor torpedo boats on June 8, 1967, during the Six-Day War. The combined air and sea attack killed 34 and wounded more than 170 crew members, and damaged the ship severely. The ship was in international waters north of the Sinai Peninsula, about 25.5 nautical miles northwest from the Egyptian city of Arish.[1]
Shortly after the attack ended, Israel informed the U.S. that its forces had attacked the Liberty in error. An Israeli inquiry by Colonel Ram Ron concluded that the attack was caused by a chain of mistakes by Israel Defense Force (IDF) personnel.[2](p.9) The IDF, in its History Report about the attack, says it asked the United States to inform them of any U.S. ships in the area but was not told of the Liberty's presence.[3](p.22) The IDF air and naval forces, respectively, misidentified the Liberty as an unknown destroyer and the Egyptian cargo ship El Quseir.[3](p.15) Supporters of Israel's explanation say that no credible motive existed for Israel to initiate a surprise attack against an important ally and the possibility of such mistakes were inherent in the tense atmosphere of the Six-Day War. The United States government was concerned about such dangers and ordered the Liberty farther away from shore but the order was not received in time due to a series of communication failures.[4] In the IDF's History Report about the attack, it points out that that "though the attack on the armed forces of a friendly nation is a most regrettable and painful occurrence, incidents of this kind do occur in war-time."[3](p.38).
Other sources claim that the attack was premeditated. They note that various aircraft, apparently Israeli, flew over Liberty at regular intervalssome at low altitudesbefore the attack; and that Liberty was about twice as large as El Quseir, designated with Latin rather than Arabic letters, displaying the US flag, and differently configured. Proponents include the surviving Liberty crewmen, [5] and some former U.S. government officials, including then-CIA director Richard Helms and then-Secretary of State Dean Rusk as well as Admiral Thomas Hinman Moorer, former Chief of Naval Operations and Chairman of the Joint Chiefs of Staff. The Johnson administration did not publicly dispute Israel's claim that the attack had been nothing more than a disastrous mistake, but internal White House documents obtained from the Lyndon B. Johnson Presidential Library show that the Israelis' explanation of how the mistake had occurred was not believed.[6]
Both the Israeli and American governments conducted inquiries into the incident, and issued reports concluding that the attack was a tragic mistake, caused by confusion about the identity of the USS Liberty. The conclusions reached in the inquiry reports remain controversial, and some veterans and intelligence officials who were involved in the incident continue to dispute the official story claiming Israels attack on the USS Liberty remains the only major maritime incident in American history not investigated by Congress.[6] In May 1968, Israel paid US$3,323,500 as full payment on behalf of the families of the 34 men killed in the attack. In March 1969 Israel paid a further $3,566,457 in compensation to the men who had been wounded. On 18 December 1980 Israel agreed to pay $6 million as settlement for the U.S. claim of $7,644,146 for material damage to the Liberty itself.[7]
On December 17, 1987, the issue was officially closed by the two governments through an exchange of diplomatic notes.