JERUSALEM, July 13 (Dan Williams/Reuters) - The captain of a Gaza-bound Libyan aid ship on Tuesday rejected an Israeli demand that it dock instead in Egypt, the mission organizers said, setting course for a new confrontation over Israel's naval blockade.

Six weeks after it drew world outcry by killing nine Turks in the botched boarding of another ship that tried to reach the Hamas-ruled Palestinian territory, Israel vowed to turn away or seize the cargo vessel Amalthea -- renamed Hope by activists.

A charity chaired by Libyan leader Muammar Gaddafi's son, Saif al-Islam Gaddafi, said in a statement an Israeli warship was near the Moldovan-flagged Amalthea, which left Greece on Saturday for what would normally be a three-day voyage to Gaza.

In response to the Israeli order to head for the Egyptian port of El Arish, the captain of the Libyan ship and the head of the foundation team on board reaffirmed that the ship's destination is Gaza and no other place, the charity said.

An Israeli military spokeswoman confirmed that a process of identification and communication with the vessel, some 100 miles (160 km) from the Gaza coast, had begun but said the ship had not been boarded.

The Israeli navy has launched preparations and activity to stop the Libyan ship, she said.

The Arabic-language news channel Al Jazeera said Israel had given the Amalthea until midnight (2100 GMT) to change tack or face possible boarding. But an Israeli military spokesman denied there had been such an ultimatum.

An Israeli source briefed on the exchange at sea said the captain had voiced interest in rerouting to El Arish. That could not be independently confirmed.


BRACED TO BOARD

After the May 31 interception of the Turkish-flagged Mavi Marmara, Israel eased overland commerce with Gaza but maintained the naval blockade in what it called a precaution against arms reaching Hamas Islamists with whom it fought a war last year.

On June 5, the navy commandeered Irish-owned aid ship Rachel Corrie after it refused orders to turn back or dock in Israel for its cargo to be vetted for possible transfer to Gaza.

International criticism of Israel, led by former Muslim ally Turkey, has focused on the continued hardship inflicted on Gaza's 1.5 million Palestinians, many of whom depend on U.N. aid handouts.

There has also been rancour over the limited powers and mandate of two internal Israeli investigations into the killings aboard the Mavi Marmara by marine commandos who said they opened fire after being set upon by passengers wielding clubs, knives and a gun. Activists aboard the ship disputed that account.

The first inquiry, by a military panel under a retired general, concluded there had been faults in planning the high seas interception but that lethal force was warranted. [nLDE66B1JJ]

Organizers said the Amalthea, with 12 crew and up to 10 activists on board, carried 2,000 tonnes of food and medicine and complied with international shipping regulations.

Hamas made clear it saw value to the ship beyond the cargo.

This story is not related only to delivering humanitarian goods, but also to breaking the siege on Gaza and opening a sea lane, Hamas official Sami Abu Zuhri told Reuters, noting that Egypt, which also borders Gaza, was maintaining its own closure.

(Writing by Dan Williams and Jeffrey Heller, Reporting by Allyn Fisher-Ilan and Ari Rabinovitch in Jerusalem and Lamine Ghanmi in Rabat, Editing by Jon Hemming)