"The military will return to intense fighting until Hamas is finally defeated," he said in a video statement.
The ceasefire has been called into question amid Hamas claims Israel violated key provisions, prompting it to call off the release of three more hostages on Saturday.
US President Donald Trump has emboldened Israel to call for the release of even more remaining hostages on Saturday but it was not clear whether Netanyahu's threat referred to the release of all remaining hostages in the Gaza Strip or just the three scheduled for release on Saturday.
Earlier on Tuesday, an Israeli official said Netanyahu ordered the army to add more troops in and around the Gaza Strip.
Netanyahu also ordered officials "to prepare for every scenario if Hamas doesn't release our hostages this Saturday," according to the official, who spoke on condition of anonymity.
So far, Hamas has released 21 hostages in a series of exchanges for hundreds of Palestinian prisoners.
Hamas reiterated on Tuesday its commitment to the ceasefire deal, saying it holds Israel accountable for any "complications or delays," according to a statement by the group.
The Israeli government's comments came as Trump met Jordan's King Abdullah on Tuesday at the White House.
Hamas on Monday said it would stop releasing Israeli hostages from the Gaza Strip until further notice, saying Israel was violating the agreement to end strikes that have pummelled the enclave.
Trump later proposed cancelling the ceasefire if Hamas does not release all remaining hostages it took on October 7, 2023, by the weekend.
Trump has said the United States should take over the Gaza Strip and move out its more than two million Palestinian residents so that the enclave can be turned into the "Riviera of the Middle East".
King Abdullah has said he rejects any moves to annex land and displace Palestinians.
Trump greeted King Abdullah and they stood together briefly before entering the White House for their meeting.
Sandwiched between Saudi Arabia, Syria, Israel and the occupied West Bank, Jordan is already home to more than two million Palestinian refugees in its population of 11 million, their status and number long providing a source of anxiety for the country's leadership.
Trump on Tuesday said Jordan, as well as Egypt, could ultimately agree to house displaced Gazan residents.
Both countries rely on the US for economic and military aid.
"I believe we'll have a parcel of land in Jordan. I believe we'll have a parcel of land in Egypt," Trump said.
"We may have someplace else but I think when we finish our talks, we'll have a place where they're going to live very happily and very safely."
Trump, who has suggested he could consider withholding aid to Jordan, said he was not using support as a threat.
"We contribute a lot of money to Jordan, and to Egypt by the way - a lot to both. But I don't have to threaten that. I think we're above that," Trump said.
While the two leaders were cordial with each other, Trump's comments about the Gaza Strip put King Abdullah in an awkward position, given the sensitivity in Jordan of the Palestinians' claim of a right to return to the lands that many fled during the war that surrounded the creation of Israel in 1948.
Trump at one point appeared to prompt King Abdullah to say he would take in Palestinians from the enclave but the king said he would do what is best for his country and said Arab countries would come to the United States with a counterproposal.
"The point is how to make this work in a way that is good for everybody," he said, without explicitly supporting or opposing Trump's plan.
with AP
