For full details, see Jeffrey St. Clair's article about attack in Counterpunch.
Here's a taste:
In early June of 1967, at the onset of the Six Day War, the Pentagon sent the USS Liberty from Spain into international waters off the coast of Gaza to monitor the progress of Israel's attack on the Arab states. The Liberty was a lightly armed surveillance ship.
Only hours after the Liberty arrived it was spotted by the Israeli military. The IDF sent out reconnaissance planes to identify the ship. They made eight trips over a period of three hours. The Liberty was flying a large US flag and was easily recognizable as an American vessel.
A few hours later more planes came. These were Israeli Mirage III fighters, armed with rockets and machine guns. As off-duty officers sunbathed on the deck, the fighters opened fire on the defenseless ship with rockets and machine guns.
A few minutes later a second wave of planes streaked overhead, French-built Mystere jets, which not only pelted the ship with gunfire but also with napalm bomblets, coating the deck with the flaming jelly. By now, the Liberty was on fire and dozens were wounded and killed, excluding several of the ship's top officers.
...After the Israeli fighter jets had emptied their arsenal of rockets, three Israeli attack boats approached the Liberty. Two torpedoes were launched at the crippled ship, one tore a 40-foot wide hole in the hull, flooding the lower compartments, and killing more than a dozen American sailors.
...Within three weeks, the Navy put out a 700-page report, exonerating the Israelis, claiming the attack had been accidental and that the Israelis had pulled back as soon as they realized their mistake. Defense Secretary Robert McNamara suggested the whole affair should be forgotten. "These errors do occur," McNamara concluded.
...The Pentagon lied to the public about the attack on the Liberty from the very beginning. In a decision personally approved by the loathsome McNamara, the Pentagon denied to the press that the Liberty was an intelligence ship, referring to it instead as a Technical Research ship, as if it were little more than a military version of Jacques Cousteau's Calypso.Also see "What Phil Saw that Day," by Gilad Atzmon, and "The Assault on the USS Liberty Still Covered Up After 26 Years," by James M. Ennes Jr.