The UNRWA (United Nations Relief and Works Agency) said it needed a full public apology to safeguard the security of UN staff operating in the area.
Israel raised a stir at the United Nations last week with its accusation against the Gaza-based UN agency which hinged on a blurry video recorded by an airborne military drone.
An army statement on Wednesday said an inquiry concluded "the nature of the object loaded on the vehicle cannot be determined with certainty. Thus the determination that the object loaded was a Qassam rocket was too unequivocal and made in haste."
UNRWA said the Israeli statement was insufficient.
Kofi Annan asked Israel to sort
out allegations diplomatically
"We are asking for an apology that is just as well publicised as the original accusation," spokesman Paul McCann said. "Not for the sake of wounded pride but to assist in the safety of our staff."
UN Secretary-General Kofi Annan appealed to Israel to handle future complaints "through normal diplomatic channels ... so that the matter may be properly investigated".
Israel originally asserted that a long, thin object that was photographed being loaded into a vehicle with UN markings was a Qassam rocket, a crude type of weapon frequently fired by Palestinian resistance fighters at illegal settlements and towns in southern Israel.
Stretcher, not rocket
UNRWA said the object was a stretcher, not a rocket.
The Israeli army on 5 October backed away from the accusation and removed the video from its website, saying doubts had been raised that warranted further investigation.
An Israeli security source said the fact that one person had lifted the object "suggested it was not heavy enough" to be a rocket.
"We are asking for an apology that is just as well publicised as the original accusation"
Israel is pressing a two-week-old offensive in northern Gaza, in which 118 Palestinians have been killed.
The ambulance spat added a chapter to the history of strained relations between the UN and Israel, which sees the world body as a bastion of anti-Israel bias and is especially suspicious of UNRWA's activities in the West Bank and Gaza.
Israel has accused UNRWA of ignoring use of its vehicles and facilities by fighters waging a four-year-old Al-Aqsa Intifada.
UNRWA denies this and accuses Israel of wanton destruction of Palestinian homes, an allegation Israel rejects.