The Arab League held an emergency session on Tuesday evening after the Israeli prime minister announced the plan in a live press conference.
Netanyahu, who is fighting for his political life ahead of elections on September 17, said he would permanently seize up to one-third of the West Bank.
Arab foreign ministers meeting in Cairo condemned the plan as “a dangerous development and new Israeli aggression by declaring the intention to violate the international law”.
“The league regards these statements as undermining the chances of any progress in the peace process and will torpedo all its foundations,” the ministers said.
Jordan’s foreign minister Ayman Safadi said Netanyahu’s plan was an outrageous election ploy and a “dangerous escalation that shatters the foundations of the peace process”.
“Killing all chances for peace for electoral purposes is irresponsible, dangerous,” Safadi added in a tweet.
Turkey’s foreign minister said the plan was racist and incendiary. “The election promise of Netanyahu, who is giving all kind of illegal, unlawful and aggressive messages before the election, is a racist apartheid state,” Mevlut Cavusoglu wrote on Twitter.
“Will defend rights and interests of our Palestinian brothers & sisters till the end,” he added.
The president of the Palestinian Authority, Mahmoud Abbas, said he would pull out of any previous agreements signed with the Tel Aviv regime if it went ahead with the move.
“(We maintain) the right to defend our rights and achieve our goals through all available means regardless of the consequences,” Abbas said, according to a report in by the state-run Wafa news agency.