Headstones were smashed and spray-painted with graffiti that said "death to the Arabs" and "price tag" during the Jewish holy day on Saturday, Haaretz reported.
"Israel shows tolerance for religious sentiments and a desire for peaceful coexistence without violence, but will show no tolerance for those who oppose it," Netanyahu said during a cabinet meeting.
Police have launched an investigation into the desecration, but no suspects have been arrested. Investigators plan to use security footage to determine the exact time the incident took place, Ynetnews.com reported Sunday.
About 150 to 200 Jewish and Arab Jaffa residents held a rally Saturday night to protest the vandalism, during which a molotov cocktail was thrown on the roof of a nearby synagogue. There were no reports of injuries or significant damage.