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The Israeli army said the troops returned fire after they were attacked with live rounds, knives, iron bars and clubs.
Israeli Naval commandos in a predawn raid stormed a civilian flotilla carrying humanitarian aid and hundreds of pro-Palestinian activists to blockaded Gaza Strip, killing at least 20 people, sparking an international outrage and triggering a diplomatic crisis.
Israel said its forces faced resistance from the activists as Navy seals slithered from hovering helicopters to board the six-ship convoy, which had on board a Nobel Laureate, European lawmakers, authors, journalists and an elderly Holocaust survivor.
The Israeli army said the troops returned fire after they were attacked with live rounds, knives, iron bars and clubs.
But Turkish charity 'Free Gaza Movement' whose ship bore the brunt of the Israeli attack said the soldiers started shooting as soon as they hit the deck and continued the fusillade even when white flag of surrender was raised.
At least 20 people were killed in the takeover of the Gaza aid convoy, al-Aqsa TV channel reported, saying that more than 50 people, including leader of the Palestinian Islamic Movement Sheikh Raed Salah, were wounded in the attack.
Israeli army said its five soldiers were wounded, two seriously. Two of the dead activists had fired at soldiers with pistols, the army claimed.
The violent takeover of the convoy set off worldwide condemnation as Muslim leaders slammed the deadly raid as "criminal and inhuman".
Hours after the violent seizures, thousands of people poured onto the streets of Istanbul, Ankara, Amman and other Muslims capitals, chanting anti-Israel slogans.
Ankara responded with fury recalling its ambassador in Tel Aviv and Egyptian President Hosni Mubarak, a close ally of Tel Aviv, denounced what he described as "Israel's use of excessive and unjustified force that led to the loss of innocent lives."
UN chief Ban ki-Moon as well as French President Nicolas Sarkozy and German Chancellor Angela Merkel also decried Jewish state for use of force against civilians.
The Israeli ambassadors in Sweden, Spain, Denmark and Greece were summoned for meetings, whereas France called for an investigation into the incident.
The Turkish ship 'Mavi Marmara' which was leading the convoy called 'Gaza Freedom flotilla' bore the brunt of the Israeli fury and most of those killed were on board the ill fated Islamic charity ship, unofficially sponsored by Turkey.
Reports said a Greek ship 'Stentoni' was also boarded by the commandos. Later, most of these ships were escorted by Israeli Naval boats to their bases.
Reports also said that number of injured had been taken to hospitals by helicopters.
The Israelis imposed a censorship on the coverage and only a limited footage of the incident was broadcast which showed a number of people injured with bandages.
Israel's Prime Minister Benjamin Netanyahu backed Israel Defence Forces on their operation against the aid ships sailing with relief material to the Gaza Strip.
Prime Minister Netanyahu reiterates his "full backing for the IDF", a statement from his office said.
Arab corespondents on board the Turkish ship in their initial reports claimed that Israeli troops started firing when they hit the deck and continued shooting even when surrender flags were raised.
Israeli Military Chief of Staff Gabi Ashkenazi said his troops faced extreme violence from the moment they reached the ships. "It was pre-mediated and included weapons, iron bars, knives and at certain stage firearms and even in some cases weapons that were snatched from his soldiers," he said.
Turkey, Iran and some Arab countries demanded an immediate session of UN security Council to take up the issue.
Palestinian Authority President Mahmoud Abbas called it a "massacre" and the Arab League urged its member states to "reconsider" their dealings with Israel.
"There is no benefit in dealing with Israel in this manner and we must re-assess our dealing with Israel," Arab League Secretary General Amr Moussa said in Doha.
This is the ninth time that the Free Gaza movement has tried to ship in humanitarian aid to Gaza since August 2008.
The Free Gaza Movement is an international group of pro-Palestinian activists that claims the blockade, imposed three years ago in 2008 after Hamas seized power in Gaza Strip, is unjust and a violation of international law.
Meanwhile, Israel's Defence Minister Ehud Barak accused the organisers for the death of activists in the bloody raid, describing the incident "a political provocation" by "violent supporters of a terror organisation".
Israel's Deputy Foreign Minister Danny Ayalon earlier accused the organisers of the flotilla of having connections to international terror outfits such as Hamas and al-Qaeda.
Ayalon said Israeli troops found weapons aboard the Gaza flotilla, which were used against IDF commandos.
The deputy foreign minister said that the Gaza flotilla did not heed Israel's calls to halt its movement toward Gaza this morning, stressing that no sovereign country would have allowed such a provocation to take place.
"We couldn't allow the opening of a corridor of smuggling arms and terrorists," said Ayalon.
Meanwhile, Prime Minister Netanyahu is mulling to call off his forthcoming trip to the US in the wake of the deaths to face unfolding diplomatic row. Netanyahu was due to head to Washington at the invitation of President Barack Obama.
Trade and Industry Minister Benjamin Ben-Eliezer voiced "regret" for deaths aboard the Gaza-bound ships.
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