Netanyahu - desperately trying to woo right-wing voters - created fresh doubts about the future of the Middle East peace process when he said that a Palestinian state would not be created if he were re-elected.
Netanyahu's Likud Party won a resounding victory against a strongly tipped centre-left opposition grouping, the Zionist Union, largely by appealing to supporters of right-wing parties such as Jewish Home, which opposes a Palestinian state.
The Israeli leader has previously committed himself to accepting a demilitarised Palestinian state as part of a comprehensive peace deal. But he said that commitment was no longer relevant in a region threatened by Islamist radicals.
In a thinly veiled rebuke of Netanyahu's volte face, a White House spokesman said Obama still believed that a two-state solution was the best means of bringing stability to the Middle East.
The Obama Administration's comments followed statements from the EU, the UN and the Palestinians demanding a renewed commitment to the stalled peace process.
Palestinian officials responded to Netanyahu's re-election by threatening to intensify diplomatic moves aimed at pressuring Israel, including pursuing it for possible war crimes in the International Criminal Court, which the Palestinian Authority is due to join on April 1.
The Palestinians' senior negotiator, Saeb Erekat, told the Voice of Palestine radio station the Palestinian Authority would end its security forces' co-operation with those of Israel.
"Now, more than ever, the international community must act. It must rally behind Palestinian efforts to internationalise our struggle for dignity and freedom through the International Criminal Court, and other peaceful means."Telegraph Group Ltd, Independent
Election results
Likud:
29
Zionist Union:
24
(Arab) Joint List:
14
Yesh Atid:
11
Kulanu:
10
Jewish Home:
8
Shas:
7
United Torah Judaism:
7
Yisrael Beiteinu:
6
Meretz:
4