Panamanian President Ricardo Martinelli told RPC radio on Monday that the ship had been headed for North Korea.
There were no immediate details on the quantity of arms aboard.
Martinelli said the undeclared military cargo appeared to include missiles and non-conventional arms. He said the ship was violating United Nations resolutions against arms trafficking.
Earlier, the president said on his Twitter account that the arms were "hidden in containers underneath the cargo of sugar."
He offered no details but posted a photo of what appeared to be a green tubular object sitting inside a cargo container or the ship's hold.
Martinelli told RPC the 35 North Koreans on the boat resisted police efforts to take the ship to the Caribbean port of Manzanillo. The crew was later taken into custody.
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Martinelli said the captain had a heart attack and also tried to commit suicide during the operation.
He said authorities had been tipped off some days ago that the ship might be carrying drugs.
[Associated
Press]
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