The report says the operation suffered from flawed intelligence-gathering and inadequate planning. But it also praised the commandos involved and found the use of force had been the only way to stop the flotilla.
Eight Turks and one Turkish-American died in the naval raid in international waters, which provoked a major outcry.
The report criticised the operation's planners for not having a back-up plan in the event of violence. But it also said the mission had not been a failure and did not recommend any dismissals.
'Professional and courageous' It said there had been a lack of co-ordination between military and intelligence bodies, and preparations for the 31 May takeover of the ships had been inadequate.
Analysis Continue reading the main story Jonathan Marcus, BBC diplomatic correspondent Jonathan Marcus, BBC Diplomatic Correspondent This Israeli military investigation confirms things went badly wrong when troops stormed the Mavi Marmara, but largely exonerates the naval commandos.
However, its findings that serious mistakes were made confirm that questions also need to be asked of Israel's political leaders, who approved the operation. The Eiland report is not the only investigation.
A former Supreme Court judge, Jacob Turkel, is conducting an inquiry into the legality of the operation.
The UN Human Rights Council may well launch its own study, though Israel does not trust this organisation and may well refuse to have anything to do with it. Pressure is on Israel to make its investigation credible. Justice Turkel is seeking to give his inquiry real investigative teeth. Here he may well be backed by the Israeli courts.
This though may still not satisfy the Turks who have nailed their colours to a fully-fledged international inquiry. As they dropped from helicopters on to the deck of one vessel, the Mavi Marmara, Israeli forces were met with a violent reception, from some of those on board who were armed with clubs and knives and at least one gun, found the report.
Presenting the findings to media in Tel Aviv, retired general Giora Eiland, who chaired the investigating panel, had both criticism and praise. "In this inquiry we found that there were some professional mistakes regarding both the intelligence and the decision-making process and some of the operational mistakes," he said. "But also, we did find some very positive findings, and one of them that should be emphasised is the very professional and courageous way that the Israeli commando behaved." General Eiland said the report was intended to help prepare Israel for similar situations which may occur in the future.
The Eiland Committee, which began its work on 7 June, scrutinised the military aspects of the raid. A separate inquiry, which includes international observers, is examining whether international law was broken during the military raid. In a statement, Israeli military chief of staff Lt Gen Gabi Ashkenazi said the Eiland inquiry had not revealed failures or negligence, but "brings up mistakes which must be corrected for future incidents".
Israel has resisted calls for a UN-led inquiry into the raid, saying it would be biased. The operation prompted an international backlash and has severely strained Israel's relations with its once-close Muslim ally Turkey.
Amid the criticism, Israel eased its land blockade on the Gaza Strip, allowing most civilian goods through. The naval blockade remains in place. Israel says it is necessary to keep weapons from reaching the Islamist Hamas movement, which controls Gaza.