1 September 2011 Last updated at 22:50 GMT
The Turkish-flagged ship was part of a convoy which aimed to break Israel's blockade on the Gaza Strip.
Nine activists were killed in the raid.
The incident, which took place in May 2010, attracted international condemnation and led to a diplomatic dispute between Israel and Turkey.
Apology demanded The report, which was originally expected to be completed by February, is due to be released on Friday, but was leaked in full to the New York Times.
"Israel's decision to board the vessels with such substantial force at a great distance from the blockade zone and with no final warning immediately prior to the boarding was excessive and unreasonable," the report concluded.
But the inquiry, led by former New Zealand prime minister Geoffrey Palmer, added that the naval blockade was legal and appropriate because it was aimed at preventing the import of weapons by sea.
The New York Times says that while Israel feels vindicated by the report, Turkey is upset with the conclusion on the legal status of Israel's naval blockade.
Meanwhile, Palestinian Islamist movement Hamas, which runs the Gaza Strip, condemned the findings as "unjust and unbalanced".
"It will allow the [Israeli] occupier to shirk its responsibilities," spokesman Sami Abu Zuhri told AFP.
The BBC's UN correspondent Barbara Plett says the publication of the report has been delayed several times to encourage reconciliation between Israel and Turkey, but that has not happened.
Turkey has insisted it will not resume full relations until Israel apologises for the deaths, which it has so far refused to do.
The panel was set up partly to help heal the rift in Turkish-Israeli relations, but in fact it may have made reconciliation more difficult, our correspondent says.
Israel's foreign ministry has said it will not comment until after the official release of the report.
An inquiry by Israel concluded in January that the raid was legal under international law, but its findings were rejected by Turkish Prime Minister Recep Tayyip Erdogan, who said it lacked credibility.
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A UN report says Israel used "excessive force" in its raid on a Gaza-bound aid flotilla last year, but said the naval blockade was legal, according to the New York Times.
The UN also found that Israeli commandos were met with "organised and violent resistance" when they boarded the Mavi Marmara, the paper reports.The Turkish-flagged ship was part of a convoy which aimed to break Israel's blockade on the Gaza Strip.
Nine activists were killed in the raid.
The incident, which took place in May 2010, attracted international condemnation and led to a diplomatic dispute between Israel and Turkey.
Apology demanded The report, which was originally expected to be completed by February, is due to be released on Friday, but was leaked in full to the New York Times.
"Israel's decision to board the vessels with such substantial force at a great distance from the blockade zone and with no final warning immediately prior to the boarding was excessive and unreasonable," the report concluded.
But the inquiry, led by former New Zealand prime minister Geoffrey Palmer, added that the naval blockade was legal and appropriate because it was aimed at preventing the import of weapons by sea.
The New York Times says that while Israel feels vindicated by the report, Turkey is upset with the conclusion on the legal status of Israel's naval blockade.
Meanwhile, Palestinian Islamist movement Hamas, which runs the Gaza Strip, condemned the findings as "unjust and unbalanced".
"It will allow the [Israeli] occupier to shirk its responsibilities," spokesman Sami Abu Zuhri told AFP.
The BBC's UN correspondent Barbara Plett says the publication of the report has been delayed several times to encourage reconciliation between Israel and Turkey, but that has not happened.
Turkey has insisted it will not resume full relations until Israel apologises for the deaths, which it has so far refused to do.
The panel was set up partly to help heal the rift in Turkish-Israeli relations, but in fact it may have made reconciliation more difficult, our correspondent says.
Israel's foreign ministry has said it will not comment until after the official release of the report.
An inquiry by Israel concluded in January that the raid was legal under international law, but its findings were rejected by Turkish Prime Minister Recep Tayyip Erdogan, who said it lacked credibility.
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