Context: On June 8, 1967 during the Six Day War, Israeli aircraft and torpedo boats attacked the USS Liberty, an American intelligence ship operating in international waters off the Sinai, killing 34 crewmen and wounding 171 despite the vessel flying a large U.S. flag and transmitting its identity. Israel later apologized and said the attack was a tragic case of mistaken identity, but many survivors and later analysts have pointed to the length of the assault, the use of napalm and torpedoes, and Israeli surveillance flights earlier in the day as evidence that the ship was well identified, making the official explanation deeply controversial. U.S. investigations ultimately accepted Israel’s account in diplomatic terms, yet dissent within the Navy and among historians has kept the episode alive as one of the most disputed friendly fire incidents of the Cold War.
Not saying they didn't know it was American. But what would be the advantage of Israel attacking a U.S. ship in that context?
There's been a lot of theories, but when i went over the Wikipedia sticker a few months ago they included stopping intentional or unintentional relaying of intelligence about Israeli actions, false flag to blame another country and pull the us into the war, and cover up evidence of war crimes.
I'll offer up another completely unsubstantiated theory, simply Israeli intelligence (Mossad) trying to swing dick on Dulles' CIA. Basically "you're not untouchable in our neck of the woods."
Interestingly enough, 14 days before this...:
"We know you're monitoring us, fuck off and stop or this will happen again."
The US was not wholly in Israel's corner at the time - the very early state of Israeli interference in US politics meant that there was still a strong pro-Arab strain in US foreign policy. It may have been legitimate suspicion that we may have been passing intel along, or it may have just been a "If you aren't with us, you're against us" message to ward any US involvement in the conflict without Israeli approval.
It's extremely hard to believe that they launched multiple sorties on a plainly identified US ship and had it all attributed to the error of multiple pilots and naval crew, who all conveniently believed the the US flag-waving ship in international waters was actually an Egyptian destroyer.