Live updates: Follow the latest news on Israel-Gaza
The UK opposition leader said the Israeli leader’s statement was “unacceptable and wrong”, stressing a two-state solution is the “only way to a secure future”.
Mr Netanyahu has vowed to press ahead with the offensive in Gaza for many months despite mounting pressure on Israel to rein in its military action as the scale of death and destruction intensifies.
On Thursday, he said he opposed US calls for the establishment of a Palestinian state when the conflict ends.
He told a national briefing that in any arrangement in the foreseeable future, “with an accord or without an accord, Israel must have security control over the entire territory west of the Jordan River”.
Speaking to broadcasters, Mr Starmer said: “Palestinian statehood is not in the gift of a neighbour. It is the inalienable right of the Palestinian people.
“It’s also the only way to a secure settlement and a secure future.”
A two-state solution that would ensure a “safe and secure Israel alongside a viable Palestinian state”, he added.
Mr Starmer came under criticism for his stance on Gaza after claiming “Israel has the right” to withhold power and water from Palestinian civilians following Hamas’s attack on October 7.
He also voted against a ceasefire in Parliament, losing many councillors from mainly Muslim communities as a result of his comments.
It comes amid a wider rift between Israel and the US over the scope of Israel's war and plans for the future of Gaza.
US Secretary of State Antony Blinken has said Israel would never have “genuine security” without a pathway towards Palestinian independence.
In response to the comments made by Mr Netanyahu in his press conference, White House national security spokesman John Kirby said: “We obviously see it differently.”
Earlier this week, the White House also announced it was the “right time” for Israel to lower the intensity of its military action in Gaza.
Israel launched the offensive after an unprecedented cross-border attack by Hamas on October 7, in which 1,200 people were killed and some 240 others taken hostage.
Roughly 130 hostages are believed by Israel to remain in Hamas captivity.
Nearly 25,000 Palestinians have been killed in Israel's assault – one of the deadliest and most destructive military campaigns in recent history, according to health authorities in Hamas-controlled Gaza.
100 days of Israel Gaza war – in pictures
Mr Netanyahu struck a defiant tone this week, repeatedly saying the offensive will not be halted until it realises its goals of destroying Hamas and bringing home all remaining hostages.
The UK Conservative government and the Labour opposition, along with the US, have said they back Israel's right to defend itself following Hamas' October 7 attacks.
Both have expressed support for a two-state solution to the conflict and a “sustainable” ceasefire – but have resisted calls to back an immediate one.
However, the Israeli government has been urged by western allies to limit the scope of its offensive and act within the parameters of international law.
Israel currently faces a case at the UN's International Court of Justice (ICJ) brought by South Africa, which accuses it of genocide over its actions in Gaza – a charge Israel denies.
UK Foreign Secretary Lord Cameron has said Britain has been “incredibly firm” in urging Israel to show restraint but that it was “nonsense” to suggest the country intends to commit genocide.