The Australian Navy said that one of its ships patrolling the region, the HMAS Darwin, intercepted a small, stateless fishing vessel about 170 nautical miles off the coast of Oman when it made the discovery.
On board they found more than 2,000 pieces of weaponry -- including 1,989 AK-47 assault rifles and 100 rocket-propelled grenades.
According to a U.S. assessment, the weapons were believed to be initially sent from Iran and were likely intended for Houthi rebels in Yemen, Lt. Ian McConnaughey with the U.S. Navy told CNN.
U.S. Central Command is still gathering more information to determine the arms' final destination, McConnaughey said.
An Australian Defense Ministry spokesman told CNN there were 18 people of various nationalities on board the ship, but officials could not initially confirm that their identification documents were valid.
Authorities believe the weapons were headed for Somalia based on interviews with crew members, but that information is preliminary and may change as the investigation continues, the spokesman said.
The crew was allowed to depart after the weapons were seized, in accordance with international maritime law.
Combined Maritime Forces
Australia is part of a multinational naval partnership, the Combined Maritime Forces, that helps police more than three million square miles of international waters.
CMF routinely conducts boardings to determine the origin of unmarked vessels (so-called "flag verification boardings") on a "regular basis," according to McConaughey. A similar number of weapons was seized in September by coalition forces.
The Darwin was on its first patrol in the region when it conducted this seizure, Vice Admiral David Johnston of the Australian Navy said.
"Darwin's successful boarding and subsequent seizure of the weapons concealed under fishing nets highlights the need to remain vigilant in the region," he said.
Iran has been accused before
of attempting to arm the Shiite Houthis in a civil war that's largely a proxy fight between those two parties and Yemeni President Abdu Rabu Mansour Hadi, who is backed by Saudi Arabia and other Sunni gulf states.
For years, the Houthis have held sway in northern Yemen but lacked influence in the country's Sunni-led government.
The Houthi rebels seized the presidential palace in January last year, temporarily forcing Hadi from Sanaa, the capital city.
Just south of Yemen across the Gulf of Aden, Somalia has been mired in similar violence since civil war broke out there in the early 1990s, following the collapse of the Siad Barre regime. Its relatively ineffective institutions -- Somalia has consistently been ranked as one of the world's most fragile or failed states by international observers -- largely failed to stymie the rise of piracy and Islamic extremism.
The United Nations has placed arms embargoes on Somalia
and rebels in Yemen.