The Department of Defence would not confirm the RFS's findings, but Blue Mountains mayor Mark Greenhill said he was not happy at all and has not yet heard from the department.
"I would have thought the community of the Blue Mountains is owed something," he told the ABC.
Mr Greenhill said even though there was no fire ban on the day, the explosives exercise should not have gone ahead.
"I would have hoped on a day like that which was a dry day, a hot day, with the winds - the Australian military would have known it wasn't a good time to be igniting," he said.
"The fire has caused great concern to my community, its done damage to my community and it just shouldn't have happened.
"It's the damage it does to the community and the stress it causes. There's the damage it does in terms of the risks taken by the firefighters, there's the damage it does in terms of the costs to the community of fighting the fire.
"And it's still going."
Defence said in a statement late on Wednesday is was "aware the NSW Rural Fire Service is of the view" the State Mine Fire was caused by a live ordnance exercise at Marangaroo and repeated it was still conducting its own investigation.
"Defence continues to co-operate fully with NSW authorities investigating the State Mine Fire, including NSW Police Force investigators who will prepare a report for the Coroner outlining the full circumstances surrounding the fire," it said.
"Defence is also conducting an inquiry into the circumstances surrounding this explosive ordnance training activity.
"Our thoughts are with everyone currently affected by the fires burning in NSW, particularly those who have had properties lost or damaged in the State Mine Fire."
RFS Commissioner Shane Fitzsimmons would not be drawn on whether defence acted irresponsibly and said he would not speculate on what was right or wrong.
"I am simply focused on where did that fire start and how did it start," he told reporters at RFS Headquarters on Wednesday night.
"I don't care if it was someone lighting them, power lines or in this case a ordnance that was exploded - we made a commitment to investigate determine and advise once we knew."
According to the RFS website, the State Mine fire has destroyed three homes and seven outbuildings.
A Watch and Act alert is still in place for the blaze.
Mr Fitzsimmons said the Defence Department had been open about the fact they may have had started the blaze.
"I don't think anybody is shying away from how this fire started," he said.
"What we did do was an investigation to confirm the speculation that was around early on last Wednesday.
"Our investigation was simply a gathering of the facts, where did the fire start, how did it start - end of story."
Defence said it was still conducting its own investigation.
NSW Premier Barry O'Farrell said it shouldn't be forgotten that the defence department had also provided a lot of firefighting assistance.
"I want to ensure that this doesn't detract from the efforts that defence have made over the past week in assisting the state's emergency services battle these fires," he told the Seven Network.
- AAP
