Israel imposed sanctions on the Gaza Strip and the ruling Hamas on Monday in retaliation for Palestinians who have launched burning kites and helium balloons carrying blazing rags.
People taking part in more than three months of protests at the Gaza border have started scores of fires by sending the balloons and kites into Israel, vexing its advanced military which is used to dealing with more conventional weapons.
Meanwhile, Israeli military fire has killed more than 130 people, including paramedics and journalists as well as protesters. Thousands more have been wounded or maimed.
With southern residents and his far-right coalition partners calling for an end to the fires, even if that requires killing the kite- and balloon-activists, Israeli Prime Minister Benjamin announced the closure of Gaza's main commercial border terminal.
Israel also cut the area in which fishing boats are allowed to operate off Gaza's Mediterranean coast, and has blacklisted what it described as a pro-Hamas TV channel.
"We will crack down immediately on the Hamas regime in the Gaza Strip," Mr Netanyahu told his parliamentary faction, to applause from politicians. The Gaza Strip has been under harsh blockade for years, preventing the movement of goods and people.
Wildfires have razed 7,000 acres of forests and farmland, Israel says.
The kites and balloons are the most effective weapon in the so-called "Great March of Return" protests that began on March 30 and which have met an often lethal Israeli army response. Gaza medics say 136 Palestinians have been shot dead.
Organisers say the Gaza demonstrations aim to press demands such as a right to the lands lost to Israel in the 1948 war of its foundation and for an Israeli-led blockade to ease.
Israel deems the protests a bid by Hamas to deflect scrutiny from Gaza's governance problems and to provide cover for armed border attacks.
Hamas decried Monday's measures as "a new Israeli crime against humanity".
"Hamas urges the international community to immediately intervene," said Fawzi Barhoum, spokesman for Hamas, which is deemed a terrorist group by Israel and the West.
The shuttered Kerem Shalom crossing is Gaza's main conduit for trade — albeit under years of Israeli restrictions. Israel said some humanitarian goods would still be allowed through the terminal.
An Israeli military statement said the Palestinian fishing zone off Gaza would revert to 11 kilometres after being temporarily expanded to 17km.
Al-Quds, a Palestinian satellite TV station, was declared a terrorist organisation by Israeli Defence Minister Avigdor Lieberman, who called it a "Hamas propaganda arm". That put the station's staff — including 15 in the Israeli-occupied West Bank and a freelancer in Jerusalem — at risk of arrest by Israel.
Lieberman said Israel did not seek a new Gaza flare-up.
"But the way Hamas is conducting itself — it is simply liable to spiral out of control, and it is liable to pay the whole price, a much, much heavier price" than in the last Gaza war, in 2014, he told reporters.