Lance Corporal Stephen B Tatum, 26, is charged with unpremeditated murder of two girls and negligent homicide on suspicion that he unlawfully killed two men, a woman and a boy.
"By the time he could recognise that he was shooting at children, his body had already acted"Paul Ware, investigator
He is also accused of assaulting another boy and a girl.
In his report, Ware said Tatum shot and killed civilians but "he did so because of his training and the circumstances he was placed in, not to exact revenge and commit murder".
"I believe... Tatum's real life experience and training on how to clear a room took over and his body instinctively began firing while his head tried to grasp at what and why he was firing," he wrote.
"By the time he could recognise that he was shooting at children, his body had already acted."
Lieutenant-General James Mattis, the commanding officer overseeing the case, has final say about whether Tatum will be court-martialled.
Tatum's lawyer, Jack Zimmerman, said he was pleased with the recommendation and would not comment further until Mattis sees the 29-page report.
Of the four enlisted marines accused of murder in Haditha, Mattis allowed charges to be dropped against Sergeant Sanick Dela Cruz and gave him immunity to testify.
Charges against Captain Randy Stone, a marine lawyer, were also dropped.
The victims in the Haditha killings died when a marine squad launched a house-to-house assault following a roadside bombing that killed one of their drivers.
Eight men were charged, four with murder and four with dereliction of duty for failing to investigate the deaths.
Staff Sergeant Frank Wuterich, the squad leader, still faces murder charges for the unpremeditated killings of 18 men, women and children.
He is scheduled to appear in court for a preliminary hearing on August 30.