The agreement called for Hamas to begin disarming and for Israel to halt its strikes and begin withdrawing from the roughly 60 per cent of the enclave it currently controls.
It was based on an October ceasefire agreement that ended major military operations and brought about the release of the remaining hostages held in the Gaza Strip but has stalled on other fronts.
Netanyahu, who faces a tough battle for re-election in October, reiterated his stance that disarmament should come first.
He said Israeli forces would continue to "do whatever is necessary to protect themselves, our territory and our citizens".
Trump's administration "sent us a draft. We did not agree. It is not our draft. We sent our comments … This is our position," Netanyahu said in a video posted on social media.
Earlier on Tuesday, Palestinians gathered for a mass funeral of more than 100 bodies finally recovered from a deadly Israeli strike in Gaza City in 2023.
More than 300 people were killed on November 22, 2023, weeks into the war with Hamas, when warplanes flattened a residential block in the city's Sabra neighbourhood.
About 40 bodies were recovered soon afterward in a frantic scramble of rough tools and bare hands but most were buried deep beneath the rubble.
Reports of the high number of victims in one of the war's deadliest attacks took days to reach the public in the chaos just before its first ceasefire.
Over the weekend, first responders dug through the destroyed buildings and recovered remains of 112 victims, including 40 children, according to the Civil Defence, a rescue agency operating under the Hamas-run interior ministry.
It said 157 bodies still have not been found.
"The only crime of these martyrs was that they remained steadfast and resilient in their homes, believing that these homes would protect them," one relative, Taysir al-Hassayna, told the Associated Press following the funeral prayers.
For the missing, it's "as if their bodies had evaporated without a trace".
Only now are some bodies of people killed in the war's ferocious early months slowly being recovered, as the fragile ceasefire allows such efforts to push ahead in parts of devastated Gaza.
Those discoveries have contributed to the war's rising toll.
The Hamas-led militant attack on southern Israel on October 7, 2023 killed about 1200 people and resulted in 251 being taken hostage.
Israel's retaliatory offensive has killed more than 73,377 Palestinians, including since the ceasefire, the Gazan health ministry said.
At least 7400 people have been reported by relatives to still be under the rubble, Zaher al-Waheidi, head of the ministry's records department, told AP.
The people mourned on Tuesday were from a residential block belonging to the Hassayna and Abu Sharia clan, and many were related.
AP has identified at least 60 families across the Gaza Strip who lost 25 or more family members during the first three months of war.
