In his most blunt remarks since the October 7 attack on Israel by Hamas which provoked the current conflict, Biden told donors that Netanyahu needed to "change" his stance on a two-state solution for the Palestinians.
Netanyahu meanwhile said there was "disagreement" with Biden over how a post-conflict Gaza would be governed, reflecting a rare rift after weeks in which the U.S. leader has strongly backed Israel.
Biden told a campaign event in Washington that Israel had "most of the world supporting it" after the Hamas attacks, in which Israel says 1,200 people died. Hundreds were also taken hostage.
"But they're starting to lose that support by the indiscriminate bombing that takes place," Biden said. The Hamas-run health ministry in Gaza said Tuesday that more than 18,400 people — mostly women and children — had been killed in Israel's bombardment since October 7.
The U.S. president also dismissed arguments that he said Netanyahu had made that allied forces had "carpet-bombed" Germany and used nuclear weapons against Japan in World War II.
Biden said he'd told Netanyahu that international institutions were set up after the war "to see to it that it didn't happen again" and reiterated that the United States had made "mistakes" after the September 11, 2001 attacks.
Biden then said that Netanyahu had a "tough decision to make" regarding his hard-right government.
"He's a good friend, but I think he has to change and, with this government, this government in Israel is making it very difficult for him to move," Biden said.
"They don't want a two-state solution," he said, describing it as the "most conservative government in Israel's history."
Two-state solution
His comments reflect a growing split over what happens after the war, with U.S. calls for Gaza to be turned over to a strengthened Palestinian Authority receiving a cool reception in Israel.
The Palestinian Authority is currently in charge of the West Bank while Islamist Hamas controls the Gaza Strip.
On Tuesday, Netanyahu said following a conversation with Biden that there was "disagreement" between the allies over "the day after Hamas."
The Israeli premier said he hoped "we will reach agreement here" but he vowed not to "repeat the mistake of Oslo," referring to the 1993 peace accords signed in the United States.
Washington has for weeks been calling on Israel to take more care to avoid civilian casualties in Gaza, saying that too many Palestinians have been killed.
Biden had given a similar warning about global support during a ceremony at the White House on Monday to mark the Jewish holiday of Hannukah.
"We have to be careful. They have to be careful. The whole world's public opinion can shift overnight, we can't let that happen," he told guests.