The Congress's Anand Sharma, who gave a notice seeking suspension of listed business of the day to discuss the matter, said it was PM Modi's prerogative to visit any country and he had delinked his visit to Israel with Palestine.
PM Modi visited Israel from July 4 to 6.
Mr Sharma said an audio clip released by an Israeli newspaper stated that Mr Netanyahu, during a close-door session with leaders from Hungary, the Czech Republic, Poland and Slovakia, told them that PM Modi chose Israel to get technology and water and, in the process ignored Palestine.
Mr Netanyahu told the European leaders in Budapest that PM Modi told him that he needed water for his people which he cannot get from Ramallah, the report said.
Mr Sharma said India has always stood in solidarity with Palestine. As Deputy Chairman PJ Kurien did not allow the notice, Mr Sharma said the comments made by the Israeli prime minister in private conversation involve "dignity of office".
The Congress's AK Anthony said this has far-reaching implications. "It is not a small issue," he added.
As the Congress members sought a response from the government, Mr Kurien said he was not blocking the government from responding, but he cannot direct them to do so. "It is up to the government whether to respond or not," he said.