Prime Minister Bill English has told parliament he's seen "compelling evidence" that New Zealand troops conducted themselves professionally under the rules of engagement during Operation Burnham.
Labour leader Andrew Little questioned Mr English closely on Tuesday about why he decided not to hold an inquiry into allegations in the book Hit and Run that civilians were killed during a raid on two villages that was led by SAS troops.
The Defence Force has said New Zealand troops did not raid the villages named in the book, and Operation Burnham, which took place about two kilometres away, resulted in the deaths of nine insurgents.
Under questioning, Mr English said it had been acknowledged since Operation Burnham took place in 2010 that it was possible there had been civilian casualties, but that had not been substantiated.
"The book talked about a series of events in a place where New Zealand troops did not go," he said.
"So that book does not substantiate civilian casualties.
"If there were substantive evidence of it, of course we would be interested in what role, if any, New Zealand troops played in those deaths."
Mr Little questioned Mr English about the video of the operation taken by US helicopter gunships, but the prime minister said he wasn't going to discuss details.
"Having viewed background material, including a small amount of classified material, I have come to the view that an inquiry into war crimes and misconduct is not required because there is no evidence that war crimes were committed," he said.
"And the evidence is compelling that our troops conducted themselves professionally in accordance with the rules of engagement, under legal supervision."
The Hit and Run authors, war correspondent Jon Stephenson and investigative reporter Nicky Hager, claimed six civilians were killed - two by SAS ground forces and four by US helicopter gunships - and 15 were injured during an attack on two villages.
After Mr English announced on Monday there wasn't going to be an inquiry, Mr Little said there was still too much doubt around the background and planning of the operation, and whether or not civilians died.
"There are some serious allegations in [the] book, they look reasonably substantiated ... and I just don't think it should be left up to the Defence Force to be the final arbiter of what the truth is about this matter," he said.
"I have great respect for (chief of defence) Tim Keating and the Defence Force personnel but they should not be left to judge their own situation where they are faced with allegations."
Mr Hager said Mr English's decision was concerning.
"He has joined the people trying to hide and dodge over what happened," he said.
"This does not appear to be a rational decision based on evidence, it is helping the military bureaucracy avoid having to front up - it is the next step in the seven year cover-up."