Israel's security cabinet was to convene on Monday for a second day of discussions on how to stave off an international flotilla intending to breach the naval blockade of Gaza, local media said.
On Sunday, ministers in the forum were told of the military's preparations for the 10-ship convoy which is expected to set sail from Greece later this week.
"Yesterday, the ministers decided not to allow the ships to anchor in the Gaza Strip, although they will be allowed to unload their cargo at (the Israeli port) of Ashdod or the Egyptian port of El-Arish," Israeli army radio said.
"If no weapons or ammunition are found, the cargo will be transferred in its entirety to Gaza."
Public radio said Cairo had already agreed to allow the ships to dock at El-Arish, a Mediterranean port which lies some 30 miles (50 kilometres) west of Egypt's border with Gaza.
So far, there has been no official Israeli statement on the closed-door ministerial deliberations.
The free-distribution daily Israel Hayom, considered close to Prime Minister Benjamin Netanyahu, quoted navy chief Eliezer Marom as telling ministers that his men were better prepared than they were last May, when marine commandos stormed the lead ship of a previous flotilla, killing nine Turks.
"Our forces are ready to stop the flotilla and not to allow the ships to reach Gaza," an unnamed political source told the paper.
About 350 pro-Palestinian activists from 22 countries are set to join the "Freedom Flotilla II" which is expected to comprise some 10 vessels.
UN Secretary General Ban Ki-moon and several international leaders have urged the flotilla not to set sail, and Washington has warned US nationals not to join the attempt to break the embargo.
Israel first imposed a blockade on Gaza in 2006 after militants there snatched Israeli soldier Gilad Shalit in a deadly cross-border raid. He is still being held.
A ban on civilian goods and foodstuffs was eased last year but many restrictions remain in place.