"Whoever harms us, we will harm them. We are prepared to meet all of the security needs of the State of Israel, both defensively and offensively," he said in comments released by his office following a visit to the Tel Nof air force base in southern Israel.
Israel has been bracing for possible Iranian retaliation for the killing of a senior general and six other Iranian officers in an airstrike on the Iranian embassy compound in Damascus on April 1. Israel has not said it was responsible but Iran's supreme leader, Ayatollah Ali Khamenei, said on Wednesday Israel "must be punished and it shall be" for the attack.
Israel chief military spokesman Rear Admiral Daniel Hagari said civilians were not being told to make any special preparations but added Israel was "highly prepared for a range of scenarios".
Netanyahu made his comments as Israeli troops and warplanes started an operation in central Gaza which the military said was aimed at destroying infrastructure of armed Palestinian groups.
Most Israeli troops have been pulled out of Gaza, in preparation for an assault on the southern Gaza city of Rafah, where more than 1 million Palestinians are sheltering, but fighting has continued in various areas of the enclave.
Residents and the military said fighters have engaged in gun battles with Israeli forces, which attacked the northern and southern areas of the Al-Nuseirat refugee camp. Israeli strikes from air, ground and sea, which so far have destroyed several buildings including two mosques, were almost non-stop, they said.
"It was as if the occupation army was launching a new war," Raouf Abed, 20, said via chat app from Deir Al-Balah to the south of Al-Nuseirat refugee camp. "The explosions were non-stop, the sounds came from different directions," he said.
"Every time we hope there will be a ceasefire, Israel escalates the aggression, as if they are trying to pressure Hamas by hitting on us, the civilians," he said.
The fighting in Gaza, now in its seventh month, has overshadowed the increasingly tense situation further north where Israeli troops have engaged in daily exchanges of fire with Hezbollah militia fighters across the border in Lebanon.
On Thursday, the military said Israeli jets hit Hezbollah military targets in the areas of Meiss el Jabal, Yarine, and Khiam, as well as a Hezbollah observation post in the area of Marwahin and another compound in Al-Dahira in southern Lebanon.
The Iranian-backed militia, which is thought to have a large arsenal of missiles, has long been considered to be one of the most likely forces that Tehran could use against Israel but so far, both sides have held back from a full scale confrontation.
Israeli military strikes killed 63 Palestinians and wounded 45 others in the past 24 hours, the Gaza Health Ministry said.
Late on Thursday, Palestinian health officials and Hamas media said an Israeli air strike killed Rudwan Rudwan, the head of the Hamas-run police force in force in Jabalia camp in the northern Gaza Strip. Hamas said Rudwan was also in charge of supervising the protection of aid truck convoys in northern Gaza areas. There was no immediate Israeli comment.
At least 33,545 Palestinians have now been killed since the Israeli offensive began, the ministry said, with most of the 2.3 million population displaced and much of the enclave laid to waste.
The war began when Hamas led an attack on southern Israel, in which 1,200 people were killed and 253 taken hostage. Around 130 are still being held incommunicado in Gaza, Israel says.
