The attack, which left hundreds of Israelis dead, sparked a devastating war in Gaza, which killed tens of thousands of Palestinians.
"October 7 was a complete failure, the IDF (military) failed in fulfilling its mission to protect Israeli civilians," a senior Israeli military official said as he briefed reporters about the inquiry's findings.
"Too many civilians died that day asking themselves in their hearts or out loud, where was the IDF," said the official, speaking on condition of anonymity in accordance with military protocols.
In a summary of the report shared with journalists, the military said: "The Israel Defense Forces failed to protect Israeli citizens. The Gaza Division was overrun in the early hours of the war, as terrorists took control and carried out massacres in the communities and roads in the area."
The military official explained that the army was "overconfident" and had miscalculated Hamas's military capabilities ahead of the attack.
The inquiry, which includes 77 separate investigations into what transpired in communities, army bases and multiple confrontation points around the Gaza periphery, is in the process of being presented to those directly affected.
This is still only a "slither of the whole process", the official said. Additional inquiries, including one into what happened at a music festival in the desert, are still to come.
- Among army's 'greatest failures' -
The Hamas attack resulted in the deaths of 1,218 people on the Israeli side, most of them civilians, according to an AFP tally based on Israeli official figures, which include hostages killed in captivity.
Out of 251 people taken hostage that day, 58 are still held in Gaza, including 34 the military says are dead.
Israel's retaliatory campaign in Gaza has killed at least 48,365 people, according to the health ministry in the Hamas-run territory.
"This was one of the most horrific events ever to take place in Israel," the army official said. "It was one of the IDF's greatest failures."
The official said the inquiry was carried out over 15 months and focuses on four key areas: military perceptions ahead of October 7; intelligence failures; events the night prior to the attack; and the army's actions on the day along with its efforts to regain control in the days that followed.
"We did not even imagine such a scenario," the army official said, noting that Israel's attention was on threats from Iran and its Lebanese proxy, Hezbollah.
The official said the army had not maintained "a comprehensive understanding of the enemy's military capabilities" and that it was "overconfident in its knowledge".
"We were addicted to precise intel," a second senior military official said, explaining that despite signs Hamas was preparing to attack, the army was too focused on what it believed was accurate information.
- Three waves of attacks -
The probe found that Hamas's attack happened in three waves and saw more than 5,000 people enter Israel from Gaza at its height.
"The first wave... included more than 1,000 Nukhba (Hamas's elite force) terrorists, who infiltrated under the cover of heavy fire," the summary of the report said.
It said the second wave involved some 2,000 militants while the third saw hundreds more militants join the incursion, along with several thousand civilians.
"In total, approximately 5,000 terrorists infiltrated Israeli territory during the attack," the report said. Hamas has maintained that hundreds of its fighters had carried out the attack.
The official said the first few hours of the attack were critical and saw the most killings and abductions.
It was then that Hamas's elite unit knocked out the military's communications system and its command and control centres, creating chaos as the army struggled to regain control.
Responding to the inquiry on Thursday, Israel's armed forces chief said he took full responsibility for failing to prevent the Hamas attack.
"The responsibility is mine. I was the commander of the army on October 7, and I also bear the full responsibility for all of you," Lieutenant General Herzi Halevi, who announced his resignation last month, said in a video statement.
In addition to Halevi, the head of the army's southern command Major General Yaron Finkelman, announced his resignation.
Military intelligence chief Major General Aharon Haliva stepped down in August.
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