There are a number of flaws in the report, as noted by NGO Monitor, and especially the disconnect between B'tselem's press release and the actual contents of the report.
Additionally, B'tselem does not give a list of all the people they are counting as civilian, so it is not possible to cross-check their statistics against the Meir Amit Intelligence and Terrorism Information Center report from December that showed that 101 terrorists were killed during the fighting. Indeed, the B'tselem report counts only 69 terrorists (62 fighters, 7 objects of targeted operations) while the ITIC report shows the photos, most in uniform, of 73 terrorists!
One of the fatalities they mention, of an 18-month old boy, is interesting in that it shows B'tselem's bias in assuming that the IDF is responsible for all deaths:
The extended Abu Khusah family lives in an isolated three-story house with a wall-enclosed inner-courtyard. The house, located in al-Bureij Refugee Camp about 1.5 km from the border with Israel, is surrounded by agricultural land which was bombed by Israeli planes during Operation Pillar of Defense. Therefore, the Abu Khusah children did not leave their home’s courtyard. B’Tselem’s investigation found that no member of the Abu Khusah family belonged to a Palestinian armed group. It was also found that no armed Palestinians had operated in the vicinity of the family's home.For every other incident listed by B'Tselem, the IDF responded that either investigations were underway or that they determined that they acted within the bounds of the laws of armed conflict. This case was the only exception. Here, the IDF replied:
On the morning of 18 November 2012, at around 8:00 AM, an Israeli plane fired into the courtyard. One-and-a-half-year-old Iyad Abu Khusah was killed by shrapnel that hit him in the head. Shrapnel hit his six-year-old brother Suhaib in the face and neck. His four-year-old cousin Sarah was hit by shrapnel in the abdomen and the lower torso.
Why would the IDF deny this attack when they admitted involvement in many other airstrikes, including others that regrettably killed children? Clearly there is no more incentive to lie about this than about any other attack.
The only reasonable answer is that the IDF must not have shot the rocket that killed Iyad Abu Khusah. (The alternative is that the IDF has such poor record-keeping that it cannot account for all its missiles.)
B'tselem says that "no armed Palestinians had operated in the vicinity," which means that they were trying to find out if the IDF had aimed at rocket launchers near the family's expansive open area. (How they determined that is not clear.) Yet they didn't even consider the idea that an errant Hamas rocket - a Grad-style rocket, most likely, but maybe one of the larger Qassams - had misfired and killed the child. Keep in mind that the family lived near the Gaza border.
B'tselem is well within its rights to be skeptical about the IDF's investigations or methodologies. A flat denial that an attack even occurred, however, should cause an objective organization to step back and come up with alternative explanations. Instead, it states as fact that "an Israeli plane fired into the courtyard." No photos, no forensics, no proof outside of what the family said - and the family never even said it was a plane, only "a huge explosion."
We've seen the damage that a Grad rocket could do; clearly it can destroy a wall. Some Qassam-class rockets could, too, under the right circumstances.
Why didn't B'tselem even consider the possibility?
Either they know something about the circumstances of the episode they are not telling us - which seems unlikely because everything they know is second-hand - or they are so emotionally invested in blaming Israel that any counter-evidence is, by default, ignored.
To B'tselem, the terrorists that may have killed Iyad Abu Khusah are assumed innocent, and the IDF is assumed guilty.