Ties with Arab states could come before peace with the Palestinians, Mr Netanyahu said: "To achieve…peace, we must look not only to Jerusalem and Ramallah, but also to Cairo, to Amman, Abu Dhabi, Riyadh and elsewhere".
Mr Netanyahu did not set out any new diplomatic initiative but indicated that moderate Arab states should update the 2002 Arab League peace plan to match the current situation in Middle East, given the civil war in Syria and the success of IS.
In his meeting with US President Barack Obama on Wednesday, the Israeli leader reiterated that there was an opportunity for Israel and some Sunni Arab states to work together.
Earlier this week, Israeli Defence Minister Moshe Ya'alon ruled out an Israeli withdrawal from the West Bank, saying that the resultant rise of a "Hamastan" in the area would put Jordan in mortal danger.
Mr Netanyahu also responded to PA President Mahmoud Abbas, who said Israel was guilty of "genocide" in Gaza in his speech to the UN last week.
The Israeli PM said: "Hamas embedded its missile batteries in residential areas and told Palestinians to ignore Israel's warnings to leave… And I say to President Abbas, these are the crimes, the war crimes, committed by your Hamas partners in the national unity government which you head and you are responsible for… In what moral universe does genocide include warning the enemy's civilian population to get out of harm's way?"
He went on: "I suppose it's the same moral universe where a man who wrote a dissertation of lies about the Holocaust, and who insists on a Palestine free of Jews, Judenrein, can stand at this podium and shamelessly accuse Israel of genocide and ethnic cleansing."
Following the breakdown of the peace process in April, Mr Abbas has renewed his unilateral campaign for a Palestinian state at the UN. Last week he announced he would seek a UN Security Council resolution to establish a timetable for the creation of a state.
Mr Netanyahu mentioned Mr Abbas only once by name, but opened his speech saying he had come "to expose the brazen lies spoken from this very podium against my country and against the brave soldiers who defend it".
The Israeli Prime Minister was also responding to an earlier speech by the Iranian President, Hassan Rouhani, whom he accused of shedding "crocodile tears" over terrorism while Iran itself was orchestrating "global terrorism".
Iran, he said, was the hub of all the Middle East's extremist movements, and he warned, "to defeat IS and leave Iran as a threshold nuclear power is to win the battle and lose the war".
Labour leader Yitzhak Herzog said: "I agreed with a lot of what he said. But the question is, does anyone in the world listen to him any more?"
