In his first public remarks since the operation began late on Thursday, Netanyahu said air strikes alone could not deal a significant blow to the network of tunnels used by Hamas militants to stage cross-border attacks on southern Israel.
"My instructions and those of the defence minister to the military, in accordance with security cabinet's approval, is to prepare for the possibility of a significant broadening of the ground activity," he told ministers at a special cabinet session at the defence ministry in Tel Aviv.
"Last night our forces began a ground operation to hit the terror tunnels crossing from Gaza into Israel's territory," he said.
"It is not possible to deal with the tunnels only from the air (so) our soldiers are doing that also on the ground."
In his remarks, Netanyahu referred to an attempted attack on Thursday by 13 Gaza militants who managed to infiltrate southern Israel by tunnel before being spotted by the army.
One of the militants was killed in an air strike and the rest retreated into the tunnel, thwarting what Netanyahu said would have been a "mass attack" on Israeli civilians.
Netanyahu said he had only ordered the troops in after several attempts to reach a ceasefire had failed.
"We chose to launch this operation after exhausting the last options," he said.
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