The rights group's report for 2004 says Israeli forces have killed some 700 Palestinians - including 150 children - mostly in unlawful circumstances.
The report lists "reckless shooting, shelling and air strikes in civilian areas... and excessive use of force".
It also condemns the killing of Israeli civilians by Palestinian militants and violence by Jewish settlers.
"Certain abuses committed by the Israeli army constituted crimes against humanity and war crimes," Amnesty's report says.
"The deliberate targeting of civilians by Palestinian armed groups constituted crimes against humanity," it adds.
An Israeli opposition MP has requested an urgent parliamentary debate on the report.
But an Israeli foreign ministry spokesman denied the charge of war crimes and said Amnesty's analysis appeared "one-sided".
The report says Palestinian armed groups killed 109 Israelis, including 59 civilians and eight children, in suicide bombings, shootings and mortar attacks.
Amnesty's accusations against the Israeli army include unlawful killings, torture, extensive and wanton destruction of property, obstruction of medical assistance and targeting of medical personnel.
Amnesty also says Israel has continued to use Palestinians as "human shields" during military operations, "forcing them to carry out tasks that endangered their lives", despite an injunction by Israel's high court banning the practice.
The report accuses Israel of offering impunity to soldiers and settlers who commit crimes against Palestinians.
"In the overwhelming majority of the thousands of cases of unlawful killings and other grave human rights violations in the previous four years, no investigations were known to have been carried out," the report says.
"The Israeli army and police ... routinely increased restrictions on the local Palestinian population in response to attacks by Israeli settlers," it adds.
In addition to the report's focus on the Israeli-Palestinian conflict, Amnesty criticises a number of regimes in neighbouring Arab countries.
Egypt and Syria are blamed for systematic torture and ill-treatment of political prisoners.
In Saudi Arabia, Amnesty highlights killings by security forces and armed groups, exacerbating the "already dire human rights situation in the country".
Jordan is said to have made scores of political arrests, amid reports of torture and ill-treatment in custody.
In Iraq, the report says US-led forces committed gross human rights violations, including unlawful killings, arbitrary detention and torture.
Armed groups in Iraq are similarly blamed for targeting civilians, hostage-taking and killing hostages.
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