Israeli Prime Minister Ehud Olmert has been criticised for taking Israel to war in Lebanon last year "hastily" and without a comprehensive plan.
A government inquiry panel found him and other leaders guilty of "very serious failings" in handling the war.
About 1,200 Lebanese and 160 Israelis were killed after Israel launched operations against Hezbollah militants who had captured two Israeli soldiers.
Mr Olmert said in a TV address he had no intention of resigning.
He admitted it was "a grave and a harsh report".
"Mistakes were made and failures committed by the key decision-makers, most notably myself," he said in a television address.
He pledged to learn the lessons and take action where necessary, but declared: "Resignation would not be the right thing to do, and I do not intend to do it."
Mr Olmert is already suffering unprecedented unpopularity levels.
But he got support from the White House, whose spokesman said President Bush viewed the Israeli leader as "essential" to Middle East peace efforts.
In Lebanon, meanwhile, a senior official from Hezbollah said the report was effectively "an admission of Israel's historic defeat".
Retired judge Eliahu Winograd presented the findings of the six-month investigation into the lead-up to war at a news conference.
He said the decision to launch the war without a well thought-out plan showed "a severe failure in judgment, responsibility and caution".
The aims of the war - to crush Hezbollah and force it to hand back two Israeli troops captured in a deadly cross-border raid - were "overly ambitious and impossible to achieve", Mr Winograd said.
Some 1,200 Lebanese, mostly civilians, and 160 Israelis, mostly soldiers, were killed in the 34-day conflict, while the two captured soldiers remain in captivity.
"The responsibility is on the prime minister, the defence minister and chief of staff," Mr Winograd said.
The former chief of staff, General Dan Halutz, has already resigned.
Israel's goals in the war were 'overly ambitious', the report said
The report did not recommend any resignations, but it is expected to raise the pressure on Mr Olmert and Defence Minister Amir Peretz.
A rally is planned for Thursday in Tel Aviv, calling for Mr Olmert and his government to quit.
David Horowitz, editor of the Jerusalem Post newspaper, told the BBC the report might be the beginning of the end for Mr Olmert.
"As a critique of the prime minister it is extremely harsh," he said. "He made hasty decisions, he didn't consult, he didn't set clear goals, the goals weren't feasible, he didn't adjust - and overall it was a very grave failure."
"The chances of him making it through the summer are very, very, very weak indeed," he added.
The commission said its report was only its interim findings.
It was ordered to investigate the full conduct of the war, but said it decided to bring forward its findings on the preparation for war, so that lessons could be learned sooner.
Its full report will follow soon, it said.