Twelve other people also on the scuba diving holiday and 14 crew members were rescued from the ship, the 'Hurricane', after the fire broke out at 0530 GMT on June 11, the company said.
The US National Weather Service issued air quality alerts for virtually the entire Atlantic seaboard.
26 firefighting teams were on the scene in an effort to gain control over the fire, including 6 planes from the aerial firefighting unit.
Several passengers pulled out their bags and bravely tried to put out the fire sparked by the e-cig with their bare hands.
Fire and Rescue Commissioner Eyal Caspi signed an order prohibiting the lighting of bonfires and fires in open areas.
Several forest fires broke out across the country and KKL and fire department teams are working together to prevent their spread.
The exercise was carried out with the aim to enhance response capabilities for the upcoming summer, amid growing risk associated with climate change and the potential for large-scale wildfires.
Fire was first believed to be used by humans in Europe 200,000 years ago. A new study using geochemistry may rewrite our previous understandings.
The fire began on Monday near Kibbutz Kalia, north of Israel's Dead Sea.
Four major fires broke out across Israel on Monday, with dozens of firefighting teams and multiple planes fighting against the flames.
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