Frustrated Palestinian youths have defied president Mahmud Abbas as well as an Israeli crackdown by staging violent protests in annexed east Jerusalem and the occupied West Bank, while 18 stabbings have targeted Jews since October 3.
There have been warnings of the risk of a full-blown uprising, or Palestinian intifada.
The stabbings have killed two Israelis and wounded about 20, including a 13-year-old critically injured on Monday.
Referring to past uprisings, Netanyahu said Israel had overcome previous bombing campaigns and "knife terror will not defeat us now".
In today's first stabbing, an 18-year-old Palestinian from east Jerusalem attacked a policeman at an entrance to the Old City and was shot dead by officers.
The policeman's protective vest stopped the knife and he was unharmed.
Later, a female attacker stabbed a policeman near the force's headquarters in Jerusalem and was shot and wounded by the officer, police said.
In another attack, two Palestinians stabbed two Israelis in the east Jerusalem settlement of Pisgat Zeev, with one attacker, 17, killed and the other, 13, shot and seriously wounded.
After nightfall an Arab man on a bus entering Jerusalem stabbed an off-duty soldier and tried to grab his weapon, lightly wounding him before being shot dead by police.
Palestinian rights group Al-Haq accused Israel of "shooting to kill" Palestinian attackers when they are surrounded by armed security personnel and no longer pose a deadly threat.
"According to international law, lethal force may not be used except when one or more lives are in actual danger," said Al-Haq director Shawan Jabarin.
It followed repeated clashes at Jerusalem's flashpoint Al-Aqsa mosque compound in September between Israeli forces and Palestinian youths.
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