The heads of Mossad and Shin Bet, the two leading intelligence agencies of Israel, described last year's Israeli-Lebanon War as a national catastrophe and a critical blow during a meeting with Prime Minister Ehud Olmert, a new book claims.

The intelligence chiefs also expressed their anger against former Israel Defence Forces (IDF) Chief of Staff, Dan Halutz, hinting that he must resign, said Ynet newspaper, quoting a new book Captives in Lebanon, written by journalists Ofer Shelah and Yoav Limor.

The book reveals the decision making processes in the political and military echelons during the War and elaborates on the army's plans and the battles.

Mossad Chief Meir Dagan and Shin Bet Chief Yuval Diskin are said to visited the Prime Minister in Jerusalem shortly after the war.

The two officials then made an unusual request of asking Olmert's military secretary to leave the room though he is usually present at all the Prime Minister's security-diplomatic meetings, according to the book.

They then passed on their clear-cut opinion that the war was a national catastrophe and Israel suffered a critical blow, it says.

The two are said to have demanded that the prime minister establish a serious and comprehensive commission of inquiry to probe the war failures.

Diskin also let Olmert understand that if such a commission was not established, he would weigh his options, the book says.

The prime minister had not made up his mind regarding an inquiry commission at this stage, it claims.

In private deliberations, the two are said to have reached the conclusion that it was hard to believe that anything would change in the army as long as Halutz remained in office.

Diskin reportedly also criticised the IDF leadership in a number of closed Shin Bet meetings, saying that two tactical mistakes made by the army -- Gilad Shalit's kidnapping and the abduction in the north -- led to a huge strategic problem for the State of Israel."

During the war, the army had turned down all the Shin Bet's offers, including hostage investigators and reserve soldiers who had served in Lebanon in the past, as well as technological assistance and experts on targeted killings in order to hit senior Hezbollah members, the report said.

Shin Bet officials believed that the IDF rejected the offers due to jealousy between the organisations, and directed most of their criticism at Halutz and Military Intelligence Chief Amos Yadlin, it said.