His comments expose the deep divisions that have emerged between Israel and President Joe Biden’s administration, who have said that the establishment of a Palestinian state should be part of the “day after” the Gaza war ends.
Mr Netanyahu said he had relayed his position to US officials.
“In any future arrangement — Israel needs security control all territory west of the Jordan," he said.
“This collides with the idea of sovereignty. What can you do?”
“The prime minister needs to be capable of saying no to our friends,” he added.
Figures released by the Hamas-run health ministry show that more than 24,000 Palestinians have been killed since the beginning of the war in Gaza, which was sparked by a brutal Hamas assault on Israeli civilians on October 7.
Hamas militants burst through Israel’s border defences and stormed through several communities that day, killing some 1,200 people, mostly civilians, and taking around 250 hostage. Israel has vowed to return all the hostages remaining in captivity.
Mr Netanyahu said that Israel had destroyed around two thirds of Hamas' fighting regiments in Gaza but vowed to continue the war “until complete victory”.
“There are two stages to the fighting; The first is destroying the Hamas regiments, those are their organised combat frameworks,” he said.
“Up until now sixteen or seventeen out of twenty four have been destroyed. After that there is the (stage) of clearing the territory (of militants). The first action is usually shorter, the second usually takes longer.”
Israel has blamed the high civilian death toll on Hamas because it fights in dense residential areas.
US State Department spokesperson, Matthew Miller, said there was “no way” to solve Israel's long-term security challenges in the region and the short-term challenges of rebuilding Gaza without the establishment of a Palestinian state.
White House national security advisor John Kirby told reporters that the US would continue to press for a two-state solution.
“There will a post-conflict Gaza, no reoccupation of Gaza,” he said.