Fishing boat carrying Sri Lankan asylum seekers is intercepted off Cocos Islands - the first boat seen in Australian waters since last November 

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A fishing boat believed to be carrying Sri Lankan asylum seekers has been intercepted off the coast of Australia's Coco Islands.

The first asylum seeker boat to sail within sight of Australia since November last year was spotted coming through the main lagoon of the sparsely populated islands on Monday morning.

Local Awie Rasa, who had previously worked as a skipper escorting asylum seeker vessels, witnessed the arrival while taking a ferry between the islands, reported ABC Hack.

A fishing boat believed to be carrying 12 asylum seekers from Sri Lanka has been intercepted on Monday of the coast of Australia's Cocos Islands

Mr Rasa said the yellow and light blue vessel was from Sri Lanka and had around 12 people on board.

'They've got the same colour boat - they're all coloured the same.'

Another local said the vessel which anchored 500m from Home Island was immediately intercepted by a police boat.

'We've had a significant presence [of] Navy and Customs guys for many months. They come, they go, they disappear for a few days and come back,'he said.

'As far as vessels reaching the lagoon and getting inside the lagoon – that's certainly the closest one that's got in for some time.'

The arrival of the suspected asylum seeker boat comes days after Immigration Minister Peter Dutton said refugee activists are encouraging self-immolations.

'I have previously expressed my frustration and anger at advocates and others who are in contact with those in Regional Processing Centres and who are encouraging them to engage in behaviours they believe will pressure the Government to bring them to Australia,' Mr Dutton wrote in a statement on Tuesday.

A 23-year-old Iranian man, Omid, was pronounced dead in Brisbane last week and Somali refugee Hadon Yasin, 21, is currently receiving treatment at Royal Brisbane Hospital for critical burns after self-immolation. 

The vessel is the first to be intercepted since November last year