The UN secretary general called today for a multinational investigation of Israel's raid on the Gaza-bound aid flotilla that left nine dead but the proposal was swiftly rejected by the Israelis.

Ban Ki-moon proposed that the inquiry be headed by the former New Zealand prime minister Geoffrey Palmer and include representatives from Turkey – under whose flag many of the ships in the aid convoy sailed – Israel and the US, an official from Israeli prime minister Binyamin Netanyahu's office said.

But Michael Oren, Israel's ambassador to Washington, told Fox News: "We are rejecting an international commission. We are discussing with the Obama administration a way in which our inquiry will take place."

Netanyahu discussed the proposal for a multinational panel with Ban in a telephone call yesterday but told cabinet ministers from his rightwing Likud party today that Israel was exploring other options, political sources said.

Ban's proposal came after Israel risked a fresh wave of international condemnation yesterday by detaining a boat carrying humanitarian aid attempting to break the blockade of Gaza and forcibly diverting it to the port of Ashdod. Israel has said that most of those aboard the MV Rachel Corrie will be deported today.

Israeli leaders have spoken publicly about setting up an internal inquiry with foreign observers into the interception of the Turkish-flagged Mavi Marmara last week.

A statement on the UN's website said Ban held telephone discussions with the prime ministers of Turkey and Israel on "options for moving forward with the investigation called for by the United Nations security council". Last week, the council called for a "prompt, impartial, credible and transparent investigation".

Five days after the botched assault on a six-boat flotilla ended with Israeli troops shooting dead eight Turkish activists and one US citizen, naval commandos boarded the MV Rachel Corrie in international waters about 20 miles from the coast of Gaza.

Yesterday's operation was mounted despite growing calls for Israel to ease significantly its siege of Gaza. The US, Israel's staunchest ally, pointedly repeated that the blockade was "unsustainable and must be changed" – a call Netanyahu again rejected. Israel said it had met no resistance in stopping the 1,200-tonne Rachel Corrie.

However, Greta Berlin of the Free Gaza Movement, an organisation behind the flotilla, said passengers and crew had four times refused to accede to Israeli demands to voluntarily divert to Ashdod, resulting in the raid.

"There's no way that 20 people are going to resist a fully armed force," she said. "The fact that Israel boarded a civilian boat in international waters is a violent act."

She expected that the 11 passengers – including the Nobel peace laureate Máiread Corrigan – and nine crew would be treated "with kid gloves. The world is watching". There had been no contact with the boat since early yesterday, she added.

Tomorrow, Britain will say £19m in aid will be given to refugees in Gaza. The money, to be spent on healthcare, education and other services, will be announced by the international development secretary, Andrew Mitchell. It will go to the UN Relief and Works Agency (UNRWA), on which about 70% of Gazans rely to meet their basic needs.

The support comes amid heightened international concern about Israel's blockade. The latest detention of a ship bound for Gaza came as the last of the Turkish citizens wounded in last week's assault on the Mavi Marmara was repatriated. It coincided with a warning from the UN's commissioner for human rights, Navi Pillay, that Israel's embargo was illegal. "International humanitarian law prohibits starvation of civilians as a method of warfare and it is also prohibited to impose collective punishment on civilians," Pillay said.

According to Israeli military accounts, commandos boarded the Rachel Corrie – named after an activist crushed to death by an Israeli bulldozer in Gaza in 2003 – from naval vessels alongside rather than winching troops from helicopters as happened in Monday's operation.

The boat, carrying medical supplies and construction materials, was towed into Ashdod. Israel said it would unload the aid and transfer it to Gaza.

The passengers – from Ireland and Malaysia – would be immediately deported, Ygal Palmor, spokesman for the Israeli foreign ministry, said.

Israel has spent the past five days struggling to contain a diplomatic crisis. Relations with its regional ally Turkey have sunk to an unprecedented low.

Autopsy reports on the dead activists yesterday revealed that five had gunshot wounds to the head. The US joined the growing international chorus for the siege to be eased. Yesterday the Free Gaza Movement said it was planning another flotilla. "We will continue until we break the siege of Gaza," Berlin said.