The government has failed to protect UK troops from "devastating" friendly-fire incidents, MPs have said.
MPs criticised delays in supplying equipment
The Commons public accounts committee said delays in supplying equipment meant "little progress" had been made.
It also criticised the failure to give out 60,000 memory aid cards - designed to avoid mistaken identity during battle - to troops in Iraq.
The government said improving combat identification was a "high priority", but the issue was "complex".
'Without further delay'
In its report, the committee said the Ministry of Defence had "failed to develop viable combat identification solutions to counter the risks of friendly-fire incidents, despite their devastating effects".
While some improvements had been made, outstanding issues had to be addressed "without further delay".
The committee found more than half of projects to improve safety had been deferred, delayed or "re-scoped" in the last four years.
The chairman, Conservative MP Edward Leigh, said progress had been "poor".
"At the moment, pretty well the only solution to avoid being shot at by an American aeroplane if you're in a war, standing on the top of a British tank, is to have a great big Union Jack flying on top of your tank," he said.
"The Americans have the technology available so that they can recognise each other, so they don't shoot each other up, but we have no system by which their aeroplanes can recognise our tanks as being friendly."
Delays and setbacks
The MoD has commissioned new technology, known as the Battlefield Target Identification System, which is designed to reduce so-called "blue-on-blue" incidents.
But the committee found this was still several years from completion and had been set back by failures to reach agreement on specifications with allied forces.
Until it is ready, a more limited version should be considered to protect British troops, the MPs said.
Solicitor Geraldine McCool acted for the widow of Lance Corporal Matty Hull who was killed by American friendly fire in Iraq in 2003.
She also acted in a case involving American A10 jets firing on UK troops in Iraq in 1991, but told BBC Radio 4's Today programme that "absolutely nothing had been done" in the intervening 12 years.
"The soldiers know that the technology is out there, but they also know it's not being used for them," she said.
"We had what was referred to as World War Two technology - all the soldiers on the ground had were (orange) panels and red smoke. Neither of which operated too well."
The MPs said the failure to give out combat identification cards was "particularly unfortunate".
These, they said, could have prevented casualties, but in evidence, Bill Jeffrey - the MoD's top civil servant - insisted the cards were now being distributed before deployment.
Armed Forces Minister Adam Ingram said the MoD would "continue to strive" to find the best ways to avoid friendly fire incidents.
But he said: "Combat identification is complex. No single piece of technology will resolve all the issues of combat identification completely."
The report also criticised delays - in one case of more than two years - to conclude formal military inquiries into the deaths and make the findings public.
And concern was raised over a failure to include allied friendly-fire deaths and non-combatant casualties on a database of incidents.
An MoD spokesman said: "The MoD continues to place a high priority on improving combat identification for its forces through the right mix of organisation, equipment and training.
"The focus is on increasing military effectiveness so that operations are conducted successfully and rapidly with the minimum number of casualties overall, including those due to friendly fire."