"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.
An Israeli court on August 4 charged World Vision's Gaza head Mohammed al-Halabi with funding "terror," while a UN engineer was indicted Tuesday on allegations of working with Hamas's military wing.
"Hamas, the terrorist organisation that runs Gaza, stole millions of dollars from humanitarian organisations like World Vision and the United Nations," said Netanyahu.
"Innocent and impoverished Palestinians were denied vital aid supplied from nations around the world," he added.
Signup to our newsletter and follow us on Facebook and Twitter!
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.
Netanyahu, for his part, said Israel "treats wounded Palestinians in its hospitals" and compared with "Hamas, that prevents injured Palestinians from getting help."
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 $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 $22.5 million (20 million euro), which makes the alleged amount of up to $50 million (44 million euro) being diverted hard to reconcile."
A 2014 war in Gaza between Israel and Hamas left more than 2,200 Palestinians dead, the majority of them civilians and including over 500 children, according to the United Nations.
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.