On a tour of the largest settlements hours after meeting US President Barack Obama's special envoy, George Mitchell, Mr Netanyahu gave his strongest rejection to any permanent freeze in settlement activity and reaffirmed a commitment to "greater Jerusalem".
He told settlers during one tree-planting ceremony: "The message is clear: we are here and will remain here. The settlement blocs are an indisputable part of Israel forever.
"This is acceptable to the great majority of Israel's citizens and is gradually being instilled in international consciousness."
In the settlement of Maaleh Adumim, Mr Netanyahu said: "We will build here as part of greater Jerusalem.
"I came here from Gush Etzyon, which is Jerusalem's southern gate. Now we're in Maaleh Adumim, which is Jerusalem's eastern gate."
Mr Netanyahu recently announced a 10-month freeze on new construction in the settlements, which he said was a show of goodwill to convince Palestinians to resume peace negotiations. But both the US and Palestinians had called for a complete and permanent freeze on building in Jewish settlements in the West Bank to help the resumption of peace talks.
Mr Obama and US Secretary of State Hillary Clinton had called for a complete freeze, but when Israel rejected this and announced the 10-month freeze, Mrs Clinton said Israel's moratorium was "unprecedented".
Palestinian officials point to the fact that during the moratorium, 3000 houses already approved were still being built.
Palestinian officials last night responded to Mr Netanyahu's comments by saying they were undermining efforts to resume the peace process.
An aide to Palestinian Authority President Mahmoud Abbass, Nabil Abu Rudeineh, told Haaretz newspaper: "This is an unacceptable act that destroys all the efforts being exerted by Senator Mitchell in order to bring the parties back to the negotiating table."
Mr Obama's chief of staff, Rahm Emanuel, himself Jewish, is increasingly being targeted in Israel as responsible for the administration's approach, which has been far more challenging of Israel than that of its predecessor.
Two right-wing activists in Israel have written to Mr Emanuel saying they will protest when he visits Israel for the bar mitzvah of his son.
Army Radio said the two activists, Baruch Marzel and Itamar Gvir, told Mr Emanuel: "You are like the Hellenists who acted against the Israel nation. You advise President Obama against Israel and incite and instigate against us. You are a traitor against the entire Jewish people."
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