In an interview with Israeli Channel 12 News, Netanyahu was asked why he had not extended Israeli sovereignty to large West Bank settlements as in East Jerusalem and the Golan Heights, other territory seized in the 1967 Middle East war.
In response, he said: “Who says that we won’t do it? We are on the way and we are discussing it.
“You are asking whether we are moving on to the next stage – the answer is yes, we will move to the next stage.
“I am going to extend [Israeli] sovereignty and I don’t distinguish between settlement blocs and the isolated settlements.”
The Palestinians want to establish a state in the occupied West Bank, East Jerusalem and the Gaza Strip.
Some 500,000 Israelis live in the West Bank and East Jerusalem, areas that are also home to more than 2.6 million Palestinians. Israel pulled out of Gaza in 2005.
Some of the parties Mr Netanyahu said he would seek to include in a coalition government if he wins the election advocate annexing parts of the West Bank.
The prime minister is competing with those parties for pro-settler voters in the 9 April election.
His comments are likely to appeal to those voters, who object to ceding lands to the Palestinians.
Settlements are one of the most heated issues in efforts to restart Israeli-Palestinian peace talks, frozen since 2014.
Most countries consider settlements that Israel has built in territory captured in the 1967 war to be illegal.
Israel disputes this citing historical ties and says the future of the land should be determined in peace talks with the Palestinians.
The United States broke with decades of international consensus last month by recognising Israeli sovereignty over the Golan Heights, territory Israel captured from Syria.
Palestinian officials could not immediately be reached for comment.
Reuters contributed to this report
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