On June 8, 1967 (during the Six-Day War), Israelis attacked the Liberty, a US Navy communications vessel. It was in international waters 15 miles north of the Sinai Peninsula. 34 American seamen were killed, 171 were wounded, and extensive damage was done to the ship. Israelis immediately apologized and claimed the attack was an accidental one, although the US said that Israel had "ample opportunity to identify the Liberty correctly." Later, Israel paid $3,323,500 in compensation.
More information:
Links to Other USS Liberty websites by crewmembers, etc.
On the lighter side, surfing off some of the above websites yielded an appropriate political joke describing the current relationship between President Bush and Saddam Hussein. Here it is. (Of course, it was probably daddy Bush.)