Israel said around 450 rockets or mortars had been fired from the Palestinian enclave run by Hamas since Saturday, and it responded with waves of air and tank strikes.
The Arab League's move comes as the Trump administration prepares to unveil a much-touted "Deal of the Century" for peace between the Palestinians and Israel in the coming months.
Israeli President Reuven Rivlin must choose who will form the next government and is expected to pick Netanyahu to do so on Wednesday night after final election results are announced.
Palestinian leaders are deeply skeptical of the US peace plan and have ruled out Trump as an honest broker after he recognized bitterly contested Jerusalem as Israel's capital.
The victory, despite corruption allegations against the 69-year-old premier, puts him on a path to become Israel's longest-serving prime minister later this year.
Iran is Israel's main enemy and Netanyahu spoke out strongly against the 2015 nuclear deal between Tehran and world powers.
His comments come just days before the closely-fought April 9 poll and could be seen as an appeal to rightwing voters, who do not believe in the feasibility of a peace agreement with the Palestinians.
Capitalizing on internal Palestinian divisions and promoting sometimes contradictory policies, Netanyahu has succeeded in managing the conflict without addressing the bigger issue.
Calm prevailed throughout Tuesday, with Hamas claiming Egypt had brokered a ceasefire, but as night fell Israel said a projectile was fired from Gaza around 8:00 pm
Netanyahu, who rejects all accusations, was due to speak at 1800 GMT and his right-wing Likud party called the allegations "political persecution.
The Israeli parliament, the Knesset, last year passed legislation to partially withhold funds, in response to PA payments to families of Palestinians jailed by Israel for attacks against Israelis.
Israel collects around USD 127 million a month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports and then transfers it to the PA.
But Talmiz Ahmad, who served as India’s ambassador to Saudi Arabia, Oman and the UAE, believes the visit has more to do with domestic compulsions.
Netanyahu could be visiting India in February or March.
Al-Qaeda in the Islamic Maghreb claimed responsibility for the attack, saying it was in reaction to the visit to Chad by Israeli Prime Minister Benjamin Netanyahu.