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The deadly boarding of a flotilla of activists off the coast of Gaza has plunged Israeli Prime Minister Benjamin Netanyahu into his worst diplomatic crisis since taking office early last year, and analysts say it could have far-reaching—and unintended—implications for Israeli security issues.

The sea battle follows a series of diplomatic setbacks for Israel, including the expulsion recently of Israeli diplomats from Britain and Australia after those governments accused Israel of forging passports used in the alleged murder of a Palestinian official in Dubai. (Israel has said there is no evidence linking Israel to the murder.)

Most recently, Israel failed last week to prevent a United Nations conference on nuclear weapons from singling it out for scrutiny as part of a pledge to work for a Middle East nuclear-free zone.

"Seemingly on the surface, the incident itself is not a strategic crisis for Israel, but Israel is already deep in trouble ... since [the Netanyahu] government came to power," says Yossi Melman, a security and defense expert, who writes for Israel's Haaretz newspaper.

The battle triggered harsh condemnation from Palestinian officials and Israel's Arab neighbors, including those few with relations with Israel. Jordan said the "horrible crime cannot be justified." Egyptian President Hosni Mubarak issued a statement condemning what he called "excessive use of force," according to Egypt's state news agency.