According to reports in the local media, the suspect has been identified only as Bo, 25, a trash collector at a local resort. He was apprehended not far from the scene of the attack.
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The police was tipped off about the suspect's whereabouts by the hotel's owner. The police found scratch marks on the man's neck and chest, and found in his room a black blood-stained shirt which he allegedly wore on the night of the attack.
Thai officers said that the suspect admitted to trying to rape the young woman while she was walking alone on the beach early on Monday morning.
Avi Dovev, of the "Israeli Home" hostel in Koh Phangan, said that the attack took place on a crowded beach.
"The Thais here usually don't hurt tourists," he said. "Generally they condemn this act and any type of violence or mistreatment of tourists.
"The Israelis here are in shock," he added. "We've received dozens of phone calls from worried parents."
A local police official said that the woman suffered wounds to her face and was found with blood stains on her clothes, the Bangkok Post reported on Monday.
According to the newspaper, the woman told police that she attended the party with friends, and left them around 3:30 am. At this point she was attacked by a man on the beach near the Tommy Resort Hotel.
According to the woman's statement, the man tried to kiss her. She tried to resist, then punched him in the stomach and fled the scene.
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