"Israel is a home for all Jews," he said at the start of the weekly cabinet meeting.
"The government of Israel serves all Israeli citizens -- secular and religious -- regardless of which stream they come from," he said, pledging to convene round table discussions between the different streams of Judaism and Israeli officials.
There were public statements of outrage from rabbis and Jewish community leader in the United States after minister David Azoulay, of the ultra-Orthodox Shas party, said in a radio interview on Tuesday that he "couldn't say" Reform Jews were Jews.
The head of the Union for Reform Judaism in the US, Rabbi Rick Jacobs, slammed his "ignorant and myopic views."
Abraham Foxman, national director of major US Jewish rights group the Anti-Defamation League, said Azoulay's comments which come at a time of "growing tensions with the non-Orthodox Jewish diaspora... Contribute to an atmosphere of exclusion and growing mistrust."
The Reform movement is the largest Jewish denomination in the US, with a Pew Research Center survey from 2013 showing that 35 per cent of US Jews identify with the movement while only 10 per cent declare themselves to be Orthodox.
Netanyahu's bid to calm the row was seen as also key to improving ties with US Jewry, crucial in maintaining the support which the Jewish state needs from its American ally.
"There is currently a serious crisis between US Jewry and Israel," said Etan Gilboa, an expert on Israel-US relations at Bar Ilan university, near Tel Aviv.
"Israel is going with the Republicans, while most (US) Jews still identify with the Democrats," he told AFP.
Gilboa said the rift with US Jewry could also affect US public opinion and Congress on the impending nuclear deal between Iran and world powers.
Israel fears the deal, yet to be finalised, would not prevent the Islamic republic from manufacturing nuclear arms, and Netanyahu has been vigorously lobbying US public opinion against it.
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