Israel's claim, released as if the general is speaking on his own, is that the military exceeded the principle of "means and intentions" during their Operation Cast Lead. The principle is that "a targeted suspect must have a weapon and show signs of intending to use it before being fired upon." Instead, Israeli soldiers were told to shoot at anything, as was revealed by testimonials of Israeli soldiers documented by the Israeli group Breaking the Silence:
This is First Sergeant Amir, a reservist from the Armored Corps who served in Israel’s Operation Cast Lead, as they call that, the Israeli assault on Gaza earlier this year. He’s describing the briefings his unit received during the training for the assault. 
FIRST SGT. AMIR: [translated] At any obstacle, any problem, we open fire and don’t ask questions, even if it’s firing in the dark, aimed at an unknown target. Fire when we don’t see, deterrent fire? No problem with that, etc. A vehicle that’s in the way? Crush it. A building in the way? Shell it. This was the spirit of things that was repeated throughout the training.
INTERVIEWER: Meaning that in briefings no one even mentions the issue of innocents?
FIRST SGT. AMIR: It is not mentioned. And if it is mentioned, it is only to say that there are no innocents, everyone there is enemy. That’s a phrase we kept hearing from that brigade commander, too, that wherever we would be, if there is anyone there, they must be the enemy.
INTERVIEWER: You had briefings before entering that included rules of engagement?
FIRST SGT. AMIR: Not that I recall. There were no rules of engagement. The rules of engagement were to shoot. Those were the rules of engagement. You see anything suspect? Shoot. 
Israel's recent admission is a preemptive attempt to mask their true "intention" of collectively punishing the Palestinians in Gaza as Israel did the country of Lebanon in 2006. It's instructive to look back at Israel's track record in Lebanon, as described in a 2009 P.U.-Litzer Award written up by Fair and Accuracy in Reporting (FAIR):
In a January 14 column, New York Times superstar pundit Tom Friedman explained Israel's war on Lebanon as an attempt to "educate" the enemy by killing civilians: The Israeli strategy was to "inflict substantial property damage and collateral casualties on Lebanon at large. It was not pretty, but it was logical." Friedman added, "The only long-term source of deterrence was to exact enough pain on the civilians--the families and employers of the militants--to restrain Hezbollah in the future." That strategy of targeting civilians to advance a political agenda is usually known as terrorism; Osama bin Laden couldn't have explained it much better.  - Thanks to GLH Blog for the tip on this.
Israel's intentional destruction of civilian areas in Beirut Lebanon has become military doctrine, now named the Dahiya doctrine. Major General Gadi Eisenkot, the Israeli Northern Command chief, expressed the premise of the Dahiya doctrine:
What happened in the Dahiya quarter of Beirut in 2006 will happen in every village from which Israel is fired on. […] We will apply disproportionate force on it and cause great damage and destruction there. From our standpoint, these are not civilian villages, they are military bases. […] This is not a recommendation. This is a plan. And it has been approved. 
What happened in the Dahiya quarter is reflected in "before" and "after" photos below.
Israel's policy of targeting violence towards civilians to achieve political goals, also known as terrorism, has been documented in the Goldstone investigation of war crimes surrounding the 2009 Gaza events. Just another of several examples,
Major General (Ret.) Giora Eiland has argued that, in the event of another war with Hizbullah, the target must not be the defeat of Hizbullah but “the destruction of the national infrastructure and intense suffering among the population… Serious damage to the Republic of Lebanon, the destruction of homes and infrastructure, and the suffering of hundreds of thousands of people are consequences that can influence Hizbollah’s behaviour more than anything else”.
Goldstone cites similar language used by General Eisenkot "while he was in active service in a senior command position and clarified that this was not a theoretical idea but an approved plan." 
Israeli politicians and cabinet members voiced similar intentions in advance of Israel's assault on Gaza. One example, of many, voices the intention of collective punishment against civilians and disproportionate use of force:
On 6 January 2009, during the military operations in Gaza, [Israeli] Deputy Prime Minister Eli Yishai stated: "It [should be] possible to destroy Gaza, so they will understand not to mess with us”.
On 2 February 2009, after the end of the military operations, Eli Yishai went on: “Even if the rockets fall in an open air or to the sea, we should hit their infrastructure, and destroy 100 homes for every rocket fired.”
Thus, for the Israeli military to simply admit that they merely broached military codes of conduct to minimize risk to their soldiers, while having a grain of truth, isn't the whole truth.
1. The Independent, Israeli commander: 'We rewrote the rules of war for Gaza', February 3, 2010.
2. DemocracyNow!, "Israeli Activists Criticize US House for Considering Resolution Condemning Goldstone Report on Israeli War Crimes in Gaza," November 3, 2009.
3. Breaking the Silence web site.
4. Fair and Accuracy in Reporting (FAIR) 2009 P.U.-Litzer Awards.
5. References to Goldstone Report, Mondoweiss.
6. Photo Credit, A comparison of the Dahiya neighborhood before and after Israel attacks in 2006 Gorillas Guides.
7. Graphic Credit: Blockade After Gaza Victory, by Zealousof Peace.