The Israeli press is in no doubt that it was a Mossad operation. And nobody in Israel has denied it. All they have said is that there is no proof. If you were falsely accused of an illegal act, would you refrain from denying your involvement, merely noting that there was no proof against you? That is not to say that the operation was wrong. On the contrary, it was that rare thing, a fully justified, truly surgical military strike.
As for the British response, it is not correct to say that David Miliband directly accused Israel of carrying out the killing. Actually he studiously avoided saying just that. All he did was accuse Mossad of cloning the passports. When challenged in Parliament to draw the natural inference that Mossad also carried out the killing, he declined, saying that the Dubai authorities are investigating the matter and he didn’t want to preempt that investigation.
As regards the decision to expel the Mossad bureau chief from London, that is a very mild response to an Israeli operation — whatever its merits — that compromised Britain internationally. Just suppose that Mossad had used 12 cloned US passports for the operation, thus bringing suspicion on all future US passport holders travelling in the Middle East. Do you thing the “non-antisemitic” US government would have turned a blind eye?