IDF sources estimated that the booby-trapped boat was activated by remote control and meant to explode near an Israeli Navy vessel or a coastal community.
A naval patrol followed the boat for about an hour and spotted no people on board. As it was several hundred meters off the Gaza shore and heading north the boat exploded.
None of the soldiers was injured and no damage was reported.
IDF Chief of Staff Lieutenant-General Gabi Ashkenazi said that the boat was loaded with a large amount of explosives.
According to the general, a nearby naval ship suspected the boat after it left the allowed area for fishing, but refrained from getting too close out of fear that the boat was booby-trapped. When the ship was within 600 meters of the Palestinian boat, artillery was fired at it, at which point the explosion occurred.
Several attempts to launch terror attacks from Gaza via the sea have been recorded in the past.
About four years ago a Palestinian man spotted swimming towards Israel was shot dead by Israeli patrol. A knife and a grenade were found on his body, and an inner tube floating nearby was found to be carrying a Kalashnikov rifle, five magazines, four grenades and a bullet proof vest.
In November 2002 four navy commando fighters were injured after a boat bomb blew off near an Israeli Daboor (navy patrol boat) off Gaza shore. The boat was believed to be headed for Israel.
Two months later, in January 2003, a raft exploded near a Daboor in the same area, causing no injuries.