"No decision by the U.N. can break the 4,000-year-old bond between the people of Israel and the land of Israel," Netanyahu said.
Former Israeli Prime Minister Ehud Olmert, however, threw his full support behind the new status for the Palestinian Authority.
"What the Palestinians moved to do today in the U.N., I think is in basic line with the strategy of a two-state solution," Olmert told CNN's Christiane Amanpour on Thursday.
The peace process is completely stalled at the moment, but Olmert said Israel must move rapidly toward a two-state solution. "Time is running out for Israel more than for the Palestinians," he said.
U.N. Secretary-General Ban Ki-moon, who supports a two-state solution, said Thursday's vote "underscores the urgency of a resumption of meaningful negotiations."
"I urge the parties to renew their commitment to a negotiated peace," Ban said.
Meanwhile in Washington, Israel's Defense Minister Ehud Barak addressed his country's relations with Iran and expressed doubt about sanctions against that country. The United Nations' nuclear watchdog has said Iran is cooperating enough in a review of its nuclear programs.
"I don't believe that these kinds of sanctions will bring them to a moment of truth where they sit around a table and look at each others eyes and decide that the game is over, they can't stand it anymore, they are going to give up their nuclear intention," Barak said.
Barak was visiting U.S. Defense Secretary Leon Panetta, who noted how the Israeli defense chief announced his retirement from political life. Panetta praised Barak's "brilliant strategic mind" and "warrior heart."