The decision clearly showed the Palestinian leadership was responsible for the bloodshed, exposing its move to join the International Criminal Court to sue Israel as a sham, Netanyahu said in a statement issued just hours after the verdict.
"The US federal court decision determines the responsibility of the Palestinian Authority for the murderous terrorist attacks of the previous decade," he said.
"Instead of drawing the requisite lesson, the Palestinian Authority (PA) is advancing steps that endanger regional stability such as the hypocritical application to the International Criminal Court even as it is allied with the Hamas terrorist organisation."
In a verdict issued late yesterday, a US jury found the Ramallah-based PA and the Palestine Liberation Organisation (PLO) responsible for six attacks which killed 33 people and wounded more than 390 others between January 2002 and January 2004.
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The attacks were carried out by militants from Hamas and the Al-Aqsa Martyrs Brigades, an armed offshoot of the Fatah movement headed at the time by the late Palestinian leader Yasser Arafat and later taken over by current president Mahmud Abbas.
Under the US anti-terrorism act, the damages are automatically tripled, meaning the full amount is more than USD 650 million.
Israel welcomed the decision as a "moral victory" but the Palestinians charged that the lawsuit was politically motivated and vowed to appeal.
The total falls well short of the USD 1 billion sought by lawyers for 11 plaintiff families when the trial opened in mid-January.