"Israel chose the path of racism, occupation and settlement building, and did not choose the path of negotiations and partnership between us," senior Palestine Liberation Organisation official Yasser Abed Rabbo told AFP.
In a snap election to Israel's 120-seat parliament on Tuesday, the Likud beat centre-left rivals the Zionist Union by 30 seats to 24.
"We are facing an Israeli society that is sick with racism, and a policy of occupation and settlement building... and ahead of us is a long and difficult road of struggle against Israel," Abed Rabbo said.
"We must complete our steps to stop security coordination (with Israel) and go to the Hague tribunal to move against settlements and Israel's crimes in its war on Gaza."
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Relations between Israel and the Palestinians have deteriorated sharply since US-brokered talks between president Mahmud Abbas's Palestinian Authority and Netanyahu's government collapsed in April last year.
The breakdown was followed by violence in Jerusalem, a bloody war between Israel and Islamist movement Hamas in the Gaza Strip, and Palestinian moves against Israel at the United Nations and the International Criminal Court in The Hague.
The Palestinians say they will seek action against Israel at the ICC as early as next month.
In the final stages of the campaign, Netanyahu ruled out the establishment of a Palestinian state if reelected, effectively reneging on his 2009 endorsement of a two-state solution.
He also pledged to build thousands of homes for Jewish settlers in annexed Arab east Jerusalem to prevent future concessions to the Palestinians.