The report released on Tuesday said the Palestinian security services were in such disarray that they may not be able to fill the vacuum left by Israel after it withdraws from the Gaza Strip this year.
Palestinian Authority spokesman Nabil Abu Rudeina acknowledged that there were shortcomings in the performance of the security services but blamed Israel for blocking the supply of weapons and other equipment.
"The continuous denial of requests for equipment to meet the needs of the police and the security services has created major difficulties in our rebuilding efforts," Abu Rudeina said.
The survey by a Washington-based think tank advising US security coordinator Leutenant General William Ward said Palestinian security services were overstaffed, poorly armed and undermined by rivalry between security chiefs as well as by corruption.
The report also criticised Israel for undermining the effectiveness of the Palestinian security services through military operations during a nearly five-year-old Palestinian uprising as well as failing to coordinate the Gaza withdrawal.
The conclusions by the Strategic Assessments Initiative group were released ahead of testimony to a US congressional committee later on Tuesday by Ward, assigned by Washington to help the Palestinian Authority overhaul its security forces.
It said Palestinian security forces "lacked the capacity and capability to fulfil core functions" and might have trouble taking control when Israel pulls its troops and 9000 settlers out of Gaza and the northern West Bank starting in mid-August.
Despite the pessimistic outlook, Israeli and Palestinian security officials said they would press ahead with meetings to coordinate the withdrawal and prevent attacks by militants as well as looting of property left by Israel after it pulls out.
Brigadier General Jamal Kayed, commander of Palestinian forces in the southern Gaza Strip, said about 7,000 police and paramilitary troops would be deployed to prevent violence and secure the settlements evacuated by Israel.
Kayed said talks were under way to set up a joint coordination office with Israel during the withdrawal.