Israel's 2006 war against Hezbollah in Lebanon was a "large and serious" failure, according to an Israeli government-appointed inquiry.
Israel has waited for Winograd's findings since late in 2006
Military and political leaders had no clear strategy, which meant Israel was "dragged" into an inconclusive ground operation in Lebanon, the report said.
PM Ehud Olmert has insisted he will not step down despite the findings.
However, public pressure could grow on partners in his governing coalition to pull out, analysts say.
Hostilities broke out in July 2006, when Hezbollah fighters captured two Israeli soldiers in a cross border raid that left three other soldiers dead.
In the conflict that followed, more than 1,000 Lebanese died, mostly civilians, along with 160 Israelis, mostly soldiers, but the captured soldiers have still not been freed.
The report said Israel could have taken two courses - a quick, devastating blow against Hezbollah or a sustained ground operation - but failed to decide on either.
"The fact Israel went to war before it decided which option to select, and without an exit strategy... constituted serious failures, which affected the whole war," report chairman Eliyahu Winograd said.
"As a result, Israel did not stop after its early military achievements, and was dragged into a ground operation only after the political and diplomatic timetable prevented its effective completion," he added.
The report is highly critical of military commanders, especially in the ground forces.
"All in all, the IDF [Israeli army] failed, especially because of the conduct of the high command and the ground forces, to provide an effective military response to the challenge posed to it by the war in Lebanon," retired senior judge Mr Winograd said.
There has been considerable interest among Israelis about a last-minute ground offensive in the hours before a UN-brokered ceasefire, in which 33 Israeli soldiers were killed.
The report said the engagement did not improve Israel's position and there were "serious failings" in army command.
However, Mr Olmert acted in what was "the interest of the state of Israel", as it appeared at the time, when he authorised the offensive.
The report recommends "systematic and profound" changes in thinking in the political and military leaderships if Israel is to face up to future challenges.
Israel cannot survive without the belief that it has "the political and military leadership, military capabilities, and social robustness" to deter aggressors, the report says.
Mr Olmert's aides said the criticism in the report was not as harsh as they had been preparing for.
"The prime minister and the government take responsibility and will make repairs," his cabinet secretary, Oved Yehezkel, said.
In Beirut, a Hezbollah spokesman said the report vindicated everything the Shia Muslim militant and political organisation had said before.
"Israel failed completely in achieving its goals and the Israeli army suffered a military defeat at the hands of Hezbollah," Hussein Rahal said.