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Israel has allowed ships through five times, but has blocked them from entering Gaza waters since a three-week military offensive against Gaza's Hamas rulers in January 2009.
Key regional ally Turkey withdrew its ambassador on Monday, the UN Security Council held an emergency session, the British foreign secretary demanded an end to the blockade of Gaza, and Jordan called Israel's raid a "heinous crime."
An al-Jazeera journalist delivering a report before Israel cut communications said Israel fired at the vessel before boarding it. In one web posting, a Turkish television reporter on the boat cried out, "These savages are killing people here, please help" - a broadcast that ended with a voice shouting in Hebrew, "Everybody shut up!"
The military said naval commandos descending from a helicopter onto the deck of a Turkish-flagged ship were assaulted by armed activists. Military footage showed activists swarming around the commandos as they rappelled from a helicopter one by one, hitting them with sticks until they fell to the deck, throwing one off the ship and hurling what the military said was a firebomb.
Speaking alongside the Canadian prime minister, Netanyahu expressed "regret" for the loss of life but said the soldiers "had to defend themselves, defend their lives, or they would have been killed."
Activists said Israeli naval commandos stormed the ships after ordering them to stop in international waters, about 80 miles (130 kilometers) from Gaza's coast.
A spokeswoman for the Free Gaza movement, which organized the flotilla, said the group's goal - beyond just bringing supplies to the impoverished territory - was to shatter the blockade.
"What we're trying to do is open a sea lane between Gaza and the rest of the world," Greta Berlin said in Cyprus. "We're not trying to be a humanitarian mission. We're trying to say to the world, 'You have no right to imprison a million and a half Palestinians."'
Israel's international image had already taken a beating from allegations that it committed war crimes during its 2008-2009 winter war in Gaza, and from widespread global opposition to the blockade. Hamas was also accused of rights violations in that conflict.
Relations with Turkey, a key supporter of the aid flotilla but also until recently Israel's staunchest ally in the Muslim world, were badly damaged by Monday's events, possibly irreparably. Ankara announced it would recall its ambassador and call off all military exercises with Israel. Around 10,000 Turks marched in protest.
At the UN, Turkey's Foreign Minister Ahmet Davutoglu called the raid "murder conducted by a state" and demanded an immediate Israeli apology, international legal action and an end to the blockade.
The bloody showdown came at a sensitive time for Israeli-Palestinian peacemaking. Netanyahu had hoped to receive a high-profile expression of support from Obama after months of strained relations over Israeli settlement construction.
Obama voiced "deep regret," over the raids, and the White House said he and Netanyahu agreed by phone to reschedule White House talks. The US recently began mediating indirect peace talks between Israel and the Palestinians following a 17-month breakdown in contacts.
Israel's immediate concern on Monday was what to do about the boats and their passengers. It ferried the wounded to hospitals by helicopter and towed the six ships to port, giving each of the activists a choice of deportation or detention.
By late Monday, about 150 of the activists - most from Turkey - had been taken off the boats, Israeli Interior Ministry spokeswoman Sabine Haddad said, adding the process would continue into Tuesday. She said about 30 had agreed to be deported, and the rest would be detained.
A commando who spoke to reporters on a naval vessel off the coast, identified only as "A," said he and his comrades were taken off guard by a group of Arabic-speaking men when they rappelled onto the deck. He said some of the soldiers were stripped of their helmets and their pistols and some had jumped overboard to escape the violence.
A high-ranking naval official displayed a box confiscated from the boat containing switchblades, slingshots, metal balls and metal bats.
Turkey's NTV network showed activists beating one commando with sticks as he landed on deck. Dr. Arnon Afek, deputy director of Chaim Sheba Medical Center outside Tel Aviv, said two commandos were brought in with gunshot wounds. Another had serious head wounds, Afek added.
At Barzilai hospital in the southern Israeli city of Ashkelon, a few activists trickled in under military escort, claiming they had been beaten during the assault.
Palestinian President Mahmoud Abbas condemned the Israeli "massacre" and declared three days of mourning across the West Bank.
Ismail Haniyeh, leader of the rival Hamas government in Gaza, condemned the "brutal" Israeli attack and called on UN Secretary-General Ban Ki-moon to intervene.
After nightfall, Hamas-linked militants fired a rocket that exploded in Israel, the militants and the Israeli military said. Nobody was hurt. The militants said the rocket attack was in response to Israel's raid on the flotilla.