Ambassador Ron Dermer made the comments at an event hosted by the Christians United for Israel group late Monday, according to a text of the speech posted on his Facebook page.
Comparing Hamas rocket fire on Israel to Germany's bombardment of London during World War II, Dermer slammed those "shamelessly accusing Israel of genocide and (who) would put us in the dock for war crimes."
"The truth is that the Israeli Defense Forces should be given the Nobel Peace Prize... A Nobel Peace Prize for fighting with unimaginable restraint."
"A missile can hit the wrong place. We can have intelligence failures. But we don't target civilians," he insisted.
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Israel was making "remarkable" efforts, he added, to get civilians to clear an area that was about to be hit including by sending out leaflets, text messages and dummy bombs ahead of the real strike.
"Israel does not target a single Palestinian civilian... when a civilian is killed it's an operational failure... And a tragedy in and of itself"
"I think Israel should earn the admiration of the international community for the restraint that it has shown in the face of these threats," Dermer told a breakfast organised by the Christian Science Monitor.
"Our soldiers are dying so that innocent Palestinians can live. That is what's happened."
"You have to ask yourself the simple question... What would America do... What would Britain, what would Canada, what would France do? Ask yourself how another country facing a similar threat would respond?"
"When a school, house, hospital, mosque is turned into a military command, or a weapons depot or a place where you can fire rockets, it becomes by the rules of war a legitimate target."
He added the Israeli ground offensive was triggered by Hamas' use of tunnels to try to sneak into the Jewish state, saying the Israeli army had destroyed about 20 tunnels so far.