The Israeli prime minister made the comment in a news briefing for foreign journalists on Sunday, where he also denied starving Gazans and claimed there is a “global campaign of lies” against Israel.
“Given Hamas’s refusal to lay down its arms, Israel has no choice but to finish the job and complete the defeat of Hamas,” he said.
Mr Netanyahu said there are “two remaining [Hamas] strongholds” in Gaza that he intends to “dismantle”, claiming this is “the best way to end the war”.
Israel’s security cabinet approved a full military takeover of Gaza City on Friday. It already controls around 75% of Gaza and has largely sealed its borders.
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Mr Netanyahu also addressed global concerns about a lack of aid being allowed into Gaza – alleging some photographs of starving children are fake.
The Israeli PM said: “The purpose of this news conference is to puncture the lies and spread the truth.”
Singling out three recent photographs, Mr Netanyahu claimed the Gazan children in them appear emaciated because they have medical conditions.
“I’m looking right now into the possibility of a governmental suit against the New York Times because this is outrageous,” he said.
Many aid organisations have said the enclave is on the verge of famine and Palestinian officials recently said at least 100 people have died of malnutrition, including 80 children.
Mr Netanyahu said: “If we had a starvation policy, no one in Gaza would have survived after two years of war.”
He also repeated the allegation that Hamas has been looting aid trucks and claimed uncollected food has been “rotting” at the border, blaming the UN for not distributing it.
Responding to a question from Sky News international correspondent Diana Magnay, Mr Netanyahu said “hundreds” of aid trucks are entering Gaza to relieve “deprivation”.
He said the price of food in Gaza is now “plummeting” due to Israel’s “humanitarian surge”.
The Israeli PM called on other countries to carry out more aid drops, despite the United Nations condemning them as dangerous.
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The war in Gaza began on 7 October 2023 when Hamas killed about 1,200 people – mostly civilians – and abducted 251 others in its attack.
Most of the hostages have been released in ceasefires or other deals. It is believed Hamas is still holding 50 captives, with 20 believed to be alive.
Israel’s retaliatory offensive has killed more than 61,000 Palestinians, according to Gaza’s Hamas-run health ministry, which does not differentiate between militants and civilians in its count.