The law popularly known as the Muezzin Law, proposed by lawmaker Anastassia Michaeli of ultra-nationalist Yisrael Beiteinu party applies to all houses of worship, but the practice is mainly prevalent in mosques.
"There's no need to be more liberal than Europe," Netanyahu was quoted by Ha'aretz as telling ministers of the ruling Likud party during a discussion on the proposed law.
However, after intense pressure from Likud ministers Limor Livnat, Dan Meridor and Michael Eitan, who harshly criticised the bill, Netanyahu announced that he was postponing the scheduled debate in the Ministerial Committee for Legislation.
Michaeli has said that hundreds of thousands of Israeli citizens routinely suffer from the noise caused by the muezzin's calls to prayer.
"The bill comes from a worldview whereby freedom of religion should not be a factor in undermining quality of life," she emphasised.
"I do not want to turn the bill into a national, religious and cultural issue," the lawmaker asserted.
"This is a green problem, not a black problem," she added in reference to the opposition the bill has garnered from politicians and civil rights groups who say it would restrict freedom of religion.
Netanyahu echoed similar sentiments discussing the measure with Likud ministers.
"I have received numerous requests from people who are bothered by the noise from the mosques," the Israeli Premier 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," the hawkish leader added.
Deputy Prime Minister Dan Meridor, however, opposed the move saying there was no need for such a law and that it would only escalate tensions.
"None of the ministers came to Netanyahu's defence or supported his position," a minister, who reportedly participated in the meeting, told the Israeli daily.
Realising that he would not be able to muster a majority in support of the law among his ministers, the Prime Minister announced that the bill would be removed from the agenda of the Ministerial Committee for Legislation, which convened a few hours after the Likud meeting.Media agencies