The yacht, named Madleen, was attempting to breach Israel’s naval blockade of the Gaza Strip to deliver a small amount of humanitarian aid.
Also on board was a French member of the European Parliament.
The vessel was diverted by Israeli forces on its way to the Israeli port city of Ashdod, although it is unclear when it will arrive.
Earlier reports suggested the yacht had already docked, but officials now say it remains en route.
Thunberg, posting on social media, claimed that those aboard had been “kidnapped.”
Israel’s foreign ministry dismissed the mission, describing the vessel as a “selfie yacht” carrying “less than a single truckload of aid.”
It added that all passengers were safe and had been given food and water.
"The show is over," the ministry also said.
In a follow-up post, Israel's diplomatic authorities reiterated that the intercepted yacht's passengers were safe and expected to return to their home countries.
They mocked the small amount of aid on board, and said that humanitarian assistance was being delivered through official channels, not "provocations and selfies."
The Palestinian foreign ministry has called for international protection for the activists abroad the intercepted vessel.
It also expressed appreciation for their efforts and joined a UN official in urging further coordinated maritime missions to deliver aid to Gaza.
The interception highlights ongoing tensions surrounding humanitarian access to Gaza, as the enclave continues to face severe shortages amid the ongoing conflict.
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Source: BBC/X/@Israel/@pmofa/Facebook.com/gretathunbergsweden