Seamen swear today that Israelis forces attacked the USS Liberty with full knowledge that it was an American naval vessel.  At the time, Israel was fighting for her life against massive Arab forces, and many say the Israelis were suspicious  of the presence of an American intelligence vessel so close to the action.  After all, the US sided with Egypt during the 1956 Suez-Sinai War in which the Israelis were allied with France and Great Britain.  Israel says it was a case of mistaken identity.

afterthe gun boats ran up along side spraying it with rounds, I believe the american flags would be a dead give away that it wasn't an arab boat

No, it was a warning.

Thats the trouble with Israel, they are not team players.