Netanyahu attended a ceremony to inaugurate the construction of 650 new housing units in a new neighbourhood of Beit El, a settlement north of Ramallah.
He vowed that his government will build more homes in the settlements.
"Our mission is to establish the Jewish people on their land and to ensure our sovereignty in our historical homeland," he said, referring to both Israel and the occupied West Bank.
Commenting on the killing of an Israeli soldier in a suspected stabbing attack outside a settlement earlier in the day, Netanyahu said Israel "will apprehend those who seek our lives", Xinhua news agency reported.
"We will deepen our roots in all parts of our homeland," he added.
During a visit to the West Bank in July, Netanyahu, who is on a re-election campaign, vowed to have thousands of new settlement homes built in "the next few years", a move sought by his right-wing electoral base.
The settlements are located in the West Bank and East Jerusalem, predominantly Palestinian territories seized by Israel in the 1967 Middle East war.
Israel annexed East Jerusalem shortly after the war and has since controlled it despite international criticism.
Some 600,000 Israelis now live in the West Bank and East Jerusalem in heavily guarded settlements along with about 2.9 million Palestin, according to Israeli figures.
The Palestin have been seeking to establish an independent state along the 1967 border with East Jerusalem as its capital.
( With inputs from IANS )