Israeli military authorities have closed their investigation into the killing of 10 members of one family in an air strike during November's eight-day war in Gaza, saying no criminal offence was suspected.

The home of the Dalou family was destroyed the conflict, resulting in the biggest single incident of civilian deaths. Among the 12 victims were four Dalou siblings aged between one and seven, and five women, including one aged 80; two of the dead were neighbours of the family. Images of the children's corpses, squashed together on a morgue tray and covered in dust and debris, were shown around the world.

The decision by Israel's Military Advocate General (MAG) to take no further action follows a special commission that examined about 80 incidents during the conflict which involved the deaths of "uninvolved civilians" or led to claims of alleged misconduct.

In 65 of those cases, the MAG "did not find a basis for opening a criminal investigation". It ordered further investigation in the remaining cases.

According to a report released by the Israeli military, the MAG found that in an unspecified number of cases "there is indeed basis for the claim that as a result of IDF [Israeli Defence Forces] attacks, uninvolved civilians were killed or injured".

This was attributed to "unintended damage" or "operational errors".

The report said: "This result, while regrettable, does not indicate a violation of the Laws of Armed Conflict, and stems directly from actions of Palestinian terrorist organisations which have chosen to conduct their unlawful activities from within the civilian population."

It also described the deaths of the Dalou family as "regrettable", saying the air strike was targeted at "a senior terrorist and several other terrorists … who constituted a military target". It went on: "Operations staff had not foreseen that, as a result of the attack, collateral damage would be caused to uninvolved civilians to the extent alleged."

Surviving members of the Dalou family have insisted there were no militants among them. Three weeks after the air strike, Bodour al-Dalou, 25, who lost her mother, brother, two sisters, a sister-in-law, an aunt and four nephews and nieces, told the Guardian: "There were no fighters in the house. I have no idea why the Israelis targeted us. I have heard they said it was a mistake, but what difference does that make?"

In response to the MAG report, Human Rights Watch said asserting that consequences of an attack were unintended or a mistake did not mean it was lawful. "In fact, 'unintended damage' and 'mistakes' that kill civilians can indeed be violations of the laws of war, if the attackers failed to take all feasible precautions before attacking to ensure their attacks would not cause disproportionate civilian harm," said HRW's Bill Van Esveld.

The Gaza-based Palestinian Centre for Human Rights condemned the MAG's decision to close the Dalou and other cases. "Israel's legal system is used as a smokescreen, to provide an illusion of investigative rigour, while in fact providing systematic cover for widespread violations of international law," it said in a statement.

About 160 Palestinians and six Israelis were killed during the conflict. The IDF said it had targeted approximately 1,500 sites inside Gaza during the eight days, and a similar number of rockets were launched by militants in Gaza with more than half reaching Israel.

The MAG concluded that the death of the son of a BBC picture editor on the first day of the conflict was not the result of IDF action. A UN report last month said it was likely that 11-month-old Omar Misharawi was killed by a stray Palestinian rocket.