The proposed law would apply to all houses of worship but the use of loudspeakers is common only in mosques, Haaretz reported.
Knesset member Anastassia Michaeli, who introduced the bill, said hundreds of thousands of Israeli citizens are subject to the noise caused by the amplified calls to prayer.
"The bill comes from a worldview whereby freedom of religion should not be a factor in undermining quality of life," she said.
Speaking to a meeting of his ministers Sunday, Netanyahu echoed that sentiment.
"I have received numerous requests from people who are bothered by the noise from the mosques," he said. "The same problem exists in all European countries, and they know how to deal with it. It's legitimate in Belgium; it's legitimate in France. Why isn't it legitimate here? We don't need to be more liberal than Europe."
However, after considerable criticism of the proposal, Netanyahu said he was postponing a scheduled debate on the bill.