The two Malaysians are journalist Ashwad Ismail and cameraman Shamsul Kamal Latip from Astro Awani, who are on board the lead Turkish ship Mavi Marmara that was boarded by Israeli commandos.
It is still uncertain if the Malaysians are among the dead or injured, said a senior Astro Awani source.
"We were on satellite phone contact but have not been in touch since last evening," he said, adding that they were trying desperately to establish contact.
Other Malaysians involved in the flotilla also include those from Perdana Global Peace Organisation.
Reports say that Israeli navy seals boarded the ship and faced violent resistance from pro-Palestinian activists on board.
The flottilla is under the coordination of the Free Gaza Movement, numerous human rights organizations, including the Turkish Relief Foundation (IHH), European Campaign to End the Siege of Gaza, and the Swedish and Greek Boat to Gaza initiatives.
The passengers include members of Parliament from around the world, U.N., human rights and trade union activists, as well as journalists sent to document the largest coordinated effort to directly confront Israel’s blockade of Gaza and take in basic supplies.
* Turkey's foreign ministry warns that the attack may lead to "irreparable consequences" in bilateral ties with Israel.
* Israel on Monday expresses its "sorrow" over those killed when Israeli navy seals stormed an aid convoy destined for the Gaza Strip: Israeli cabinet minister.
* Israel's military censor jammed the reporting of any information about casualties being transferred to Israeli hospitals.
Earlier, AP quoted an al-Jazeera satellite channel reported by telephone from the Turkish ship leading the flotilla that Israeli navy forces fired at the ship and boarded it, wounding the captain.
The Turkish NTV network also reported an Israeli takeover with gunfire, and at least two people were killed.
The al-Jazeera broadcast ended with a voice shouting in Hebrew, "Everybody shut up!"
The reports came just after daybreak, with the flotilla still well away from the Gaza shore. Israel had declared it would not allow the ships to reach Gaza.
The head of the Gaza Hamas government, Ismail Haniyeh, condemned the "brutal" Israeli attack.
"We call on the Secretary-General of the U.N., Ban Ki-moon, to shoulder his responsibilities to protect the safety of the solidarity groups who were on board these ships and to secure their way to Gaza," Haniyeh told The Associated Press.
On Sunday, Huwaida Arraf, one of the organizers, said the six-ship flotilla began the journey from international waters off the coast of Cyprus on Sunday afternoon after two days of delays.
She said they expected to reach Gaza, about 250 miles (400 kilometers) away, on Monday afternoon, and that two more ships would follow in "a second wave."
The flotilla was "fully prepared for the different scenarios" that might arise, and organizers were hopeful that Israeli authorities would "do what's right" and not stop the convoy, she said.
"We fully intend to go to Gaza regardless of any intimidation or threats of violence against us," she said. "They are going to have to forcefully stop us."
After nightfall Sunday, three Israeli navy missile boats left their base in Haifa, steaming out to sea to confront the activists' ships.
Two hours later, Israel Radio broadcast a recording of one of the missile boats warning the flotilla not to approach Gaza.
"If you ignore this order and enter the blockaded area, the Israeli navy will be forced to take all the necessary measures in order to enforce this blockade," the radio message continued.
The al-Jazeera satellite channel reported that the ships changed course to try to avoid a nighttime confrontation, preferring a daylight showdown for better publicity.
The flotilla, which includes three cargo ships and three passenger ships, is trying to draw attention to Israel's three-year blockade of the Gaza Strip.
The boats are carrying items that Israel bars from reaching Gaza, like cement and other building materials. The activists said they also were carrying hundreds of electric-powered wheelchairs, prefabricated homes and water purifiers.
Israeli Foreign Ministry spokesman Yigal Palmor said that after a security check, permitted humanitarian aid confiscated from the boats will be transferred to Gaza through authorized channels.
However, Israel would not transfer items it has banned from Gaza under its blockade rules. Palmor said that for example, cement would be allowed only if it is tied to a specific project.
This is the ninth time that the Free Gaza movement has tried to ship in humanitarian aid to Gaza since August 2008.
Israel has let ships through five times, but has blocked them from entering Gaza waters since a three-week military offensive against Gaza's Hamas rulers in January 2009. The flotilla bound for Gaza is the largest to date.
Some 700 pro-Palestinian activists are on the boats, including 1976 Nobel Peace Prize laureate Mairead Corrigan Maguire of Northern Ireland, European legislators and an elderly Holocaust survivor.
The mission has experienced repeated delays, both due to mechanical problems and a decision by Cyprus to bar any boat from sailing from its shore to Gaza.
The ban forced a group of European lawmakers to depart from the breakaway Turkish Cypriot northern part of the island late Saturday.
Israel and Egypt imposed the blockade on Gaza after Hamas militants violently seized control of the seaside territory in June 2007.
Israel says the measures are needed to prevent Hamas, which has fired thousands of rockets at Israel, from building up its arsenal.
But U.N. officials and international aid groups say the blockade has been counterproductive, failing to weaken the Islamic militant group while devastating the local economy.
In particular, the ban on building materials has prevented Gazans from repairing thousands of homes that were damaged or destroyed in an Israeli military offensive, meant to stop Hamas rocket attacks, early last year.
Israel rejects claims of a humanitarian crisis in Gaza, saying it allows more than enough food and medicine into the territory.
The Israelis also point to the bustling smuggling industry along Gaza's southern border with Egypt, which has managed to bring consumer goods, gasoline and livestock into the seaside strip.
Israel has condemned the flotilla as a provocation and vowed to block it from reaching Gaza.
Palmor said foreigners on the ships would be "sent back to their countries." Activists who did not willingly agree to be deported would be detained. A special detention facility has been set up in the southern Israeli city of Ashdod.
At Gaza's tiny port, meant for small fishing boats, Hamas officials, activists and foreign nationals prepared to welcome the flotilla, sitting in some 40 small boats that were bobbing in the sea and decorated with the flags of the countries of the pro-Palestinian activists, including Turkey and Algeria. - AP
GOD DAMN THE ZIONIST AND THOSE WHO SUPPORT THEM.GOD DAMN EGYPT's GOVERNMENT.MAY GOD PUNISH THEM.