"We've decided to engage with the ICC, the engagement will be limited solely to the question of authority" to deal with Palestine, the official told AFP on condition of anonymity.
The Palestinian Authority last month submitted a first dossier of evidence to the ICC, following a decision by the court's chief prosecutor Fatou Bensouda to launch a preliminary probe.
The probe, ordered in January, was set up to establish whether there was enough evidence for a full-blown war crimes investigation into last year's conflict in the Gaza Strip between Israel and the Palestinian Islamist movement Hamas.
Netanyahu also noted that Israel's actions were subject to the review of its own legal system.
The Palestinian appeal to the ICC is part of an increased focus on diplomatic manoeuvring following mounting frustration with the lack of progress in creating their own independent state.
A June UN report said both Israel and Palestinian militants may have committed war crimes during the 2014 Gaza conflict.
