Al-Usbua's report quotes sources from Sudan's capitol Khartoum, who say missiles were fired towards the ship from "an unidentified boat, which may be Israeli or American."
The report says the Iranian ship was headed for Sudan in order to unload the weapons, which would then travel by land to the Gaza Strip. But the ship was sunk by the missiles, along with its crew.
Last month CBS reported that in January the Israeli Air Force (IAF) struck a Sudanese convoy attempting to deliver arms to Gaza. The report said 17 trucks had been bombed, killing 39 people.
Two Israeli security officials interviewed by Time Magazine denied other reports saying Israel had bombed an Iranian weapons ship and another convoy. "There was one strike and it was significant," one of the officials said.
"This is not the first time the Iranians have tried to send Hamas a shipment of this size through Sudan, and this was probably also the last time," he added.