PT-346 was an 80 ft Electric Launch Company (Elco) motor torpedo boat which suffered the worst PT-boat friendly-fire casualties of World War II, with nine men killed and nine wounded by airstrike.

On 27 March 1944, PT-346 and PT-354 rescued the survivors of PT-353 and PT-121, which had been mistakenly destroyed during a mission off the coast of New Britain by five fighter planes under the command of the Royal Australian Air Force.

PT-347 had become stuck on a reef during a night patrol to intercept enemy barges and destroy shore installations off the coast of Rabaul in Lassul Bay, located off the northwest corner of New Britain Island in New Guinea.

(The waters of the Pacific were not well charted and during World War II, more PT boats were lost to reefs than to enemy fire.)

At 0700, PT-350 was attempting to dislodge PT-347 from the reef, when two American Marine Corsair planes mistook the PT boats for Japanese gunboats and attacked.

Factors that contributed to the incident included an influx of new pilots who lacked experience in recognizing PT boats, poor communications between the planes and PT boats, and the fact that the incident occurred in an area of the Pacific which was the "line of demarcation" between Nimitz and MacArthur's Pacific commands, which meant that coordination of reports between the two commands did not always occur.