Sarkozy's comments came amid reports of a fall-out between Israel and the United States over the settlements.
Netanyahu had been due to meet George Mitchell, the US Middle East envoy, in the French capital but the talks were called off amid reports, denied by Israeli officials, of a clash over Israel's refusal to stop building more settlements.
Sarkozy has previously welcomed as "an important step forward" Netanyahu's landmark endorsement earlier this month of a Palestinian state, despite a raft of conditions rejected outright by Palestinian leaders.
But Paris, like Washington, is insisting on a complete halt to settlement activity in the occupied West Bank, which the Israeli leader has so far refused to order.
The Palestinians have said they will not meet Netanyahu until Israel halts all settlement activity.
The presence of 280,000 Israelis in more than 100 settlements across the occupied territory has been a major obstacle to peace efforts.
The international community considers all settlements in the the West Bank and east Jerusalem, which Israel seized in the 1967 Arab-Israeli war, to be illegal.