"To me the setting of preconditions is an insurmountable obstacle," Netanyahu told the foreign affairs and defence committee, a parliamentary statement said.
The Palestinians say they will only return to negotiations if Israel stops building on land they want for their future state and if the Jewish state agrees to negotiate on the basis of the borders that existed before the 1967 Middle East war.
Israel demands talks "without preconditions" and refuses publicly to freeze settlement building.
US Secretary of State John Kerry has postponed an expected trip to Israel and Palestinian territories to attend White House talks on Syria, US officials told AFP today.
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Israel HaYom, a newspaper considered close to Netanyahu also said Kerry had been due to arrive tomorrow.
It said he delayed to give Palestinian president Mahmud Abbas more time to decide whether to drop his insistence on a settlement freeze.
Last week, Kerry warned that if his efforts to kickstart the peace negotiations, frozen since 2010, fail now, there may never be another chance.
Israeli news website Ynet quoted Netanyahu as telling a meeting of senior members of his Likud party that he had received no US request for a settlement freeze.
But he told the parliamentary committee that the alternative to statehood for the Palestinians would be for them and Israelis to share one country, and that was not an option.
"If we go into direct negotiations, it is likely to be very hard but the alternative of a binational state is one we do not want," he said.
Speaking at the weekly cabinet meeting yesterday, Netanyahu -- who in 2009 declared his support for a two-state solution -- said he and Kerry will "try to make progress to find the opening for negotiations with the Palestinians, with the goal of reaching an agreement".