Pakistani Intel: 'We Were Caught by Surprise'
An ISI official told the BBC the compound in Abbottabad where Bin Laden was killed by US forces on Sunday had been raided in 2003.
But the compound "was not on our radar" since then, the official said.
He gave new details of the raid, saying Bin Laden's young daughter had said she saw her father shot.
Bin Laden, 54, was the founder and leader of al-Qaeda. He is believed to have ordered the attacks on New York and Washington on 11 September 2001, as well as a number of other deadly bombings.
The ISI official told the BBC's Owen Bennett-Jones in Islamabad that the compound in Abbottabad, just 100km (62 miles) from the capital, was raided when under construction in 2003.
It was believed an al-Qaeda operative, Abu Faraj al-Libi, was there.
But since then, "the compound was not on our radar, it is an embarrassment for the ISI", the official said. "We're good, but we're not God."
He added: "This one failure should not make us look totally incompetent. Look at our track record. For the last 10 years, we have captured Taliban and al-Qaeda in their hundreds - more than any other countries put together."
The compound is just a few hundred metres from the Pakistan Military Academy - the country's equivalent of West Point or Sandhurst.
The ISI official also gave new or differing accounts of some of the events of Sunday's raid. They included:
- There were 17-18 people in the compound at the time of the attack
- The Americans took away one person still alive, possibly a Bin Laden son
- Those who survived the attack included a wife, a daughter and eight to nine other children, not apparently Bin Laden's; all had their hands tied by the Americans
- The surviving Yemeni wife said they had moved to the compound a few months ago
- Bin Laden's daughter, aged 12 or 13, saw her father shot
The official said it was thought the Americans wanted to take away the surviving women and children but had to abandon the plan when one of the helicopters malfunctioned.
The helicopter was destroyed by the special forces unit.
The US has not commented on anyone it captured or had planned to capture, other than saying it had taken Bin Laden's body.
The ISI official said the organisation had recovered some documents from the compound.
The CIA is already said to be going through a large number of hard drives and storage devices seized in the raid.
White House counter-terrorism adviser John Brennan said there had been concern Pakistani forces would deploy to counter the US Navy Seal team conducting the raid but it had avoided any confrontation.
The ISI official said: "We were totally caught by surprise. They were in and out before we could react."