(Recasts with U.S. Navy statement, adds details)

By Yusri Mohamed

ISMAILIA, Egypt, March 25 (Reuters) - A cargo ship chartered by the U.S. Navy opened fire when approached by an Egyptian motorboat late on Monday near the Suez Canal, and Egyptian and US officials gave conflicting reports on Tuesday on casualties.

Egyptian security sources and witnesses said the gunfire killed an Egyptian trader on the motorboat and wounded two other people. The U.S. Navy said it had recorded no casualties.

The small Egyptian craft had been trying to sell goods to ships passing through the Suez Canal, the Egyptian sources said.

The U.S. Navy said the Global Patriot, on short-term charter to the military, had fired warning shots near the Egyptian boat after it ignored verbal orders and a signal flare telling it to stay away.

"Global Patriot was approached by several boats while preparing to transit the Suez Canal," the Navy said in a statement.

"The boats were hailed and warned by a native Arabic speaker on the Global Patriot to advise them to turn away ... One small boat continued to approach the ship and received two sets of warning shots 20-30 metres in front of the boat's bow."

All shots were accounted for as they entered the water, and there were no reports of casualties, the Navy said.

The Egyptian sources, speaking on the customary condition of anonymity, said Mohammed Fouad Afifi Gaafer had been killed by bullets from the U.S. ship and was buried on Tuesday after Egyptian authorities turned his body over to his family.

The Global Patriot had been waiting to pass through the Suez Canal, used by U.S. ships heading to and from the Gulf, from the Red Sea to the Mediterranean, the sources said.

The Navy contracted the Global Patriot in February to carry military goods to locations including the Gulf, Navy public affairs officer Nathan Christensen told Reuters.

In January, the United States said five small Iranian speedboats aggressively approached three U.S. Navy ships in the Strait of Hormuz, a key shipping route for Gulf oil. U.S. officials have said U.S. sailors were close to opening fire but the Iranian boats veered away.

The Suez Canal is an important source of foreign currency for Egypt, along with tourism, oil and gas exports and remittances from Egyptians living abroad. (Reporting by Yusri Mohamed and Will Rasmussen; writing by Will Rasmussen; editing by Tim Pearce)

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