Hanegbi said Israeli reserve units were not mobilised early enough and that it took too long to realise that Israeli air power alone could not halt Hezbollah rocket fire into Israel.
Israel failed in its primary objective of defeating the Hezbollah.
He also stated that a ground offensive should have been launched earlier in the campaign.
The report also accused military chiefs of "not having developed its operational plans and not to have prepared an appropriate plan of attack against Hezbollah"
The report also criticised the government for "not having presented the army with clear objectives".
A wave of public criticism erupted in Israel following the conflict, widely perceived as a failure for not having stopped Hezbollah rocket fire and for having failed to retrieve two Israeli servicemen whose capture by the Shia group sparked the conflict.
The Israeli government's Winograd Commission, established to look into the conflict, is due to release its final report early next year.
In April, the commission published an interim report in which it blasted Dan Halutz, the former army chief, and Amir Peretz, ex-minister for defence, for having failed in their duties. Both have since resigned.
The report holds Ehud Olmert, the Israeli prime minister, responsible for "serious failure," it said.