"The prime minister instructed the relevant government bodies to examine a worldwide campaign to amend the international laws of war to adapt them to the spread of global terrorism," Netanyahu's office said in a statement following Tuesday's meeting.
It added that the cabinet had also instructed justice ministry officials to form a committee to deal with the prospect of "legal proceedings abroad against the state of Israel or its citizens".
"We need to keep punching a hole in this lie that is spreading with the help of the Goldstone report," Netanyahu was quoted as saying in the statement.
'Freedom of action'
The statement was backed by Israel's defence minister, Ehud Barak, who said a change in the international laws of war was "in the interest of anyone fighting terrorism".
"We need to keep punching a hole in this lie that is spreading with the help of the Goldstone report"
He added that the government wanted to give the Israeli military "the full backing to have the freedom of action".
The UN-backed Goldstone report – compiled by South African jurist Richard Goldstone - accuses Israel and Hamas of committing war crimes during last winter's war in Gaza, but is more critical of Israeli troops for "terrorising and targeting" civilians.
Goldstone recommended that the conclusions of the report be forwarded to the prosecutor at the International Criminal Court at The Hague if the two sides fail to conduct credible investigations into the conflict within six months.
On Friday, the UN Human Rights Council (UNHRC) endorsed the report, but Netanyahu has promised that it will be vetoed at the UN General Assembly.
Israel has previously called the report unbalanced, while Netanyahu has promised a lengthy fight to "delegitimise" the findings by the UN commission.
An Israeli official, speaking to Reuters on condition of anonymity, said the issue of establishing an official inquiry into the conduct of the military during the Gaza campaign was not raised at Tuesday's meeting.
Richard Goldstone himself has faced a storm of personal attacks inside Israel since the report's publication.
But on Monday he urged the Israeli government to comply with calls for a full investigation into the war, rejecting suggestions that the report risked sinking the stalled Middle East peace process.
"It's a shallow, utterly false allegation," Goldstone said during a meeting with a group of rabbis in the United States. "What peace process are they talking about? There isn't one."
And the former judge denied his report suggested Israel has no right to defend itself.
"We didn't look at the justification of the military operation at all. We took that as a given," Goldstone told Al Jazeera.
"We looked at war not as jus ad bellum, the right to use force, but jus in bello, the way force is actually used in war.
"International humanitarian law deals with how wars are fought, not whether they are just or unjust, legal wars or illegal. We didn't question Israel's right to self-defence", Goldstone told Al Jazeera.
Noting that international humanitarian law developed following the crimes committed against Jews by Nazi Germany almost 70 years ago, Goldstone said he was disappointed that Tel Aviv was now making such an effort to change such laws.
"It is sad ... it is really clutiching at straws too. International law cannot be changed because one party doesn't like the rules. It is much more complex than that," he said.
About 1,400 Palestinians - the majority of them civilians - and 13 Israelis were killed during Israel's three-week war on Gaza between December and January, which had the stated aim of stopping rocket attacks by Palestinian fighters from the coastal territory.