The Italian gave an honest appraisal of one of England's worst-ever World Cup performances, in which Wayne Rooney was frustrated and out of sorts.
When asked about Rooney specifically, Capello said: "I don't like to speak about one player. I prefer to speak about the team. Rooney didn't play like Rooney, but he is not the problem. It is the pressure of the World Cup. These players are training very well. But these two games they were not the same."
He added: "We did not play a good game. We missed a lot of balls when we had to control. We missed a lot of passes and when we arrived at the box we tended to shoot at the goalkeeper. We missed everything. In this game I did not see the spirit of the team."
Capello also admitted England were "lucky" to still have a chance of getting to the last 16 after the USA drew 2-2 against Slovenia.
"We have to be focused for the next game," he said. "We have a big chance to go through after the draw of the United States.
"I hope on Wednesday to see the England team. This is not the England that I know. It is not the players in training. When I started as England manager I saw the same things when we played at Wembley. I hope for the next game that we forget this performance and forget to play with fear and without confidence.
"It is incredible the mistakes of the players, when they do not control the ball, the easy passes we missed. Everything. This is incredible for the level of the England players. It is the pressure. It is so big that the performance of the players is not as good as I know."
Algeria coach Rabah Saadane also claimed England played below their potential.
He said: "I was expecting better, I don't know what happened. The England team was not up to its level. They played better against the USA. It is up to the coach to draw the necessary conclusions towards the England team. We caused them problems with our short passes and style of play."
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