Asked by an interviewer with the Israeli news site, NRG, if it was true that a Palestinian nation would never be formed while he's prime minister, Netanyahu replied, "Indeed."
His interview with NRG came as he courted conservative supporters a day before Israelis head to the polls for national elections.
"Anyone who is going to establish a Palestinian state, anyone who is going to evacuate territories today, is simply giving a base for attacks to the radical Islam against Israel," he said. "This is the true reality that was created here in the last few years."
Netanyahu went on to say that any opponents on the left who might argue otherwise are "sticking their head in the sand, time and time again."
He further said a strong government led by his Likud Party is necessary to beat back international pressure to divide Jerusalem and return Israel to its pre-1967 borders, according to a Jewish Telegraphic Agency report on the NRG interview.
"I do not give in," Netanyahu told NRG. "We stood fast against huge pressure, and we will continue to do so."
Following Netanyahu's interview, chief Palestinian negotiator Saeb Erekat, who is also a member of the executive committee of the Palestine Liberation Organization, said the Israeli Prime Minister's stance is nothing new.
"Netanyahu has done everything possible to bury the two-state solution," he said. "Netanyahu's statement at the illegal settlement of Har Homa is a response to all those governments who tried to block Palestinian diplomatic initiatives. He couldn't have done that without counting on full impunity from the international community. Now the world must learn its lesson and understand that impunity won't bring peace, only justice will."
Earlier in the day, Netanyahu continued his efforts to drum up support during a campaign speech in the Har Homa neighborhood of Jerusalem, which he boasted that he helped establish in 1997, during his first prime ministerial term.
Israel considers Har Homa part of a unified Jerusalem, while Palestinians consider the neighborhood an illegal settlement.
If he is re-elected, Netanyahu said, he will continue to promote construction in Jerusalem as a means of national security, he said.
"The pressure around this decision back then was enormous. But I insisted -- I ordered the construction and it paid off," he said. "Today, Har Homa is a flourishing neighborhood in which tens of thousands of Israeli civilians are living. As we proved in the past, my friends in the Likud Party and I, we will keep Jerusalem protected and keep developing it."
Opposition leaders Isaac Herzog and Tzipi Livni of the Zionist Union, he alleged, are "ready to surrender to every dictate." Livni, he said, has denounced previous calls for more construction in Jerusalem's Jewish neighborhoods, while Herzog would strive to establish a Palestinian capital in East Jerusalem.
"I will not let that happen," he said. "My friends and I in the Likud will keep Jerusalem united in all its parts, and we will keep fortifying it so that dividing it will not be possible and it will always remain united. We will keep developing our eternal capital."
A vote for Herzog or Livni is a vote for the establishment of "Hamastan," Netanyahu said, referring to Hamas, the Islamist group which dominates Gaza. He further alleged that his opponents would yield to international pressure and "huge financial support coming from abroad, from left-leaning tycoons and foreign governments."
He closed his speech saying, "The meaning of this is simple: We will not be able to keep Israel safe and secure and the terror against us that once emerged through these hills with machine guns will turn into missile fire."