Mr Netanyahu said: "We will do everything possible to restore calm in the south."
After the cameras stopped rolling, he added:"Those who criticise me and the government over our conduct are irresponsible and doing so for political ends".
Mr Lieberman responded: "You were the one who held a press conference after the kidnapped teens’ funeral and before the cabinet and only spouted slogans without backing them up.
"What I said about Gaza and Israeli Arabs are things I have been telling my constituents for years.
“You promised to deal a harsh blow on Hamas but nothing came of it and they continue to shoot at citizens."
Mr Netanyahu then criticised Mr Lieberman for talking to the media without coming to cabinet meetings during the recent kidnap of the three teens.
Mr Lieberman missed a recent meeting as he was on a political visit to Germany, but returned when the bodies of the three teens were found.