Israel is ramping up its crackdown on the Islamic terror group Hamas.
Over 130 Palestinians have been killed by Israeli fire, drawing global criticism of Israel.
He warned that the decision to prevent export and import through the commercial crossing on the border between the southeastern Gaza Strip and Israel will double the suffering of the people in Gaza.
Hamas leaders say shutting the Karam Abu Salem crossing is a crime against the Palestinian people. "The occupation regime is responsible for the political, legal and security consequences of this decision".
According to a statement released by the Israeli army, the Kerem Shalom border crossing will be closed in response to "incendiary kite attacks" by Palestinian activists. "From fish and vegetables to clothing items and wood", he said.
On May 29, another vessel from the Gaza Strip, called Al-Hurriyah (Liberty), attempted to run the blockade.
It said that "as of today, the expansion of the fishing zone from six to nine nautical miles, that was in effect for three months during the summer, is over" for Gaza fishermen. Gaza medics say 136 Palestinians have been shot dead.
The "Freedom Boat 2" is the second humanitarian flotilla to set out from blockaded Gaza since Palestinians first began holding regular rallies along the Gaza-Israel security fence on March 30.
"We do not intend to continue absorbing and continuing with this situation", Lieberman said in separate comments to his own parliamentary faction.
"The IDF seized a Palestinian boat carrying some 17 sailors who broke the sea blockade", the navy said at the time.
Hamas decried Monday's measures as "a new Israeli crime against humanity".
"What's needed is pressure on global community".
Local authorities on the Palestinian side of the crossing said they were told by the Israeli side that only fuel, foodstuffs, health and medical materials, livestock and feeds would be allowed through the terminal.
The military statement, and separate remarks by Israeli Defence Minister Avigdor Lieberman, linked the new measures to fires from incendiary kites and helium balloons that have been flown over the border since the protests began on March 30.
At least 135 people have been killed by Israeli gunfire during the popular demonstrations - dubbed the Great March of Return - that have been taking place along the fence with Israel.