Israel Wednesday decided to release a German-owned ship seized with 50 tons of weapons on board and allow it to continue its journey to the Egyptian port of Alexandria, dpa reported.
Israel Radio said the weapons, believed destined for Palestinian militants in Gaza, were confiscated and taken to an Israeli military warehouse.
An Israeli military spokeswoman in Tel Aviv would not confirm the report.
Israeli naval commandoes boarded the Victoria Tuesday in international waters, 200 nautical miles off the Israeli coast, as it headed from the Turkish port of Mersin to Alexandria.
It had earlier sailed to Turkey from the Syrian port of Lattakia where the weapons were apparently taken aboard.
Israeli Prime Minister Benjamin Netanyahu charged the weapons had come to Syria from Iran and were earmarked for Palestinian militants in Gaza. Iran denied the allegation.
The weapons caught were listed as 2,270 60-millimetre mortar shells, 230 120-millimetre ones, six C-704 anti-ship missiles, two radar systems manufactured in England, two launchers, two hydraulic mounting cranes for radar system and 66,960 7.62-millimetre bullets for Kalashnikov assault rifles.
The C-704 shore-to-sea missiles have a range of 35 kilometers and had they reached Gaza this would have meant "a significant gain" in the capabilities of Palestinian militant factions there, said the military.
"The deadly weaponry that you see here originated in Iran," Netanyahu told reporters in Ashdod as the weapons were displayed behind him.
"We see the writing. Defence Minister Ehud Barak is holding, in a plastic bag, a greeting written in Persian, for using some of these weapons," he said.
"Their final objective was Israeli citizens," he said, referring to rocket attacks from the Gaza Strip at southern Israeli communities by Palestinian militants.
The Victoria, while owned by a German company and operated by a French shipping company, sailed under a Liberian flag.
Neither the ship's Romanian captain, nor its crew had known of the container in which the weapons were hidden behind sacks with cotton, an army spokeswoman said.
German, Liberian and French authorities had all been notified of the ship's interception as the operation was under way.
Israel made a point of noting that "Turkey is not tied to the incident in any way," a statement released by the military said.
Israel seized another German-owned ship, the Francop, with hundreds of tons of weapons on board, off its coast in November 2009.
The weapons, including some 3,000 rockets and shells later laid out on the dock at the southern Israeli port of Ashdod, were allegedly earmarked for the radical Shiite Hezbollah movement in Lebanon and had come from Iran.
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