Netanyahu's statement came shortly after the Palestinian embassy in Egypt announced that the Rafah crossing, the main gateway for Gazans to leave and enter the enclave, would reopen on Monday for entry into Gaza.
Netanyahu's government and Hamas have been trading blame over violations of the US-mediated ceasefire for days.
The US State Department said it had received "credible reports" indicating Hamas would violate the pact.
"Should Hamas proceed with this attack, measures will be taken to protect the people of Gaza and preserve the integrity of the ceasefire," the department said in a statement late on Saturday, without providing details.
Hamas denied on Sunday accusations of an "imminent attack" or a "violation" of the ceasefire.
It accused Israeli authorities of forming, arming and funding "criminal gangs" that carried out murders and kidnappings and aided looting.
The Palestinian militant group said police forces in Gaza were performing their duty by pursuing those gangs to hold them accountable.
"The movement calls on the US administration to stop repeating the occupation's misleading narrative," it said.
US President Donald Trump had said he would consider allowing Israeli forces to resume fighting in Gaza if Hamas fails to uphold its end of the ceasefire deal that he brokered.
Meanwhile, Hamas said Netanyahu's decision "constitutes a blatant violation of the ceasefire agreement and a repudiation of the commitments he made to the mediators and guarantor parties".
It also said the continued closure of the Rafah crossing would prevent the entry of equipment needed to search for and locate more hostage bodies under the rubble, and would thus delay the recovery and handover of the remains.
Israel said it received two more bodies late on Saturday, meaning 12 out of 28 bodies have been handed over under a US-brokered ceasefire and hostage deal agreed between Israel and Hamas last week.
The war has caused a humanitarian catastrophe in Gaza, with nearly all inhabitants driven from their homes, a global hunger monitor confirming famine and health authorities overwhelmed.Â
The dispute over the return of bodies, and shipment of life-saving humanitarian aid, underlines the fragility of the ceasefire and still has the potential to upset the deal along with other major issues that are included Trump's 20-point plan to end the war.
As part of the deal, Hamas released all 20 living Israeli hostages it had been holding for two years, in return for almost 2000 Palestinian detainees and convicted prisoners jailed in Israel.
But Israel says that Hamas has been too slow to hand over bodies of deceased hostages it still holds. The militant group says locating some of the bodies amid the vast destruction in Gaza will take time.
The deal requires Israel to return 360 bodies of Palestinian militants for the deceased Israeli hostages. So far, it has handed over 15 bodies in return for each Israeli body it has received.
Rafah has largely been shut since May 2024. The ceasefire deal also includes the ramping up of aid into the enclave, where hundreds of thousands of people were determined in August to be affected by famine, according to the IPC global hunger monitor.
After cutting off all supplies for 11 weeks in March, Israel increased aid to Gaza in July, scaling it up further since the ceasefire.
Some 560 metric tonnes of food had entered Gaza per day on average since the US-brokered truce, but this was still well below the scale of need, according to the UN World Food Programme.
