"I, the prime minister of Israel, care more about Palestinians than their own leaders do," Netanyahu said in a video posted online, which provoked outrage from the Palestinians.
"Israel cares more about Palestinians than their own leaders do," he added.
The Israeli leader said his comments were in response to allegations that the militant Islamic Hamas, which rules the Gaza Strip, stole aid from a major charity and the United Nations.
"Hamas, the terrorist organisation that runs Gaza, stole millions of dollars from humanitarian organisations like World Vision and the United Nations," said Netanyahu.
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"Innocent and impoverished Palestinians were denied vital aid supplied from nations around the world," he added.
Saeb Erekat, secretary general of the Palestine Liberation Organisation, said "the hate that Netanyahu has against the Palestinian people makes him invent a parallel history."
"Netanyahu is convinced that Palestinians should be thankful for living under an apartheid regime and in exile," he said in a statement to AFP.
The two accused humanitarian workers have yet to be tried, and Halabi's lawyer denies the charges.
World Vision, while taking the allegations seriously, has said it has seen no evidence presented by Israel and has poured scorn on numbers presented by the Israeli security services that said more than USD 7 million (6.2 million euro) a year was stolen.
It said in a statement the "cumulative operating budget in Gaza for the past 10 years was approximately USD 22.5 million (20 million euro), which makes the alleged amount of up to USD 50 million (44 million euro) being diverted hard to reconcile."
Israel has maintained a tight blockade on Gaza for a decade, restricting access of many basic goods. Thirty-eight percent of Palestinians in Gaza are unemployed, according to the World Bank.
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