When Jewish Home threatened to leave the government if Bennett was not appointed in Lieberman's place, early elections seemed nearly inevitable.
Bennett's comments also drew criticism from Attorney General Avichai Mandelblit, a retired major general who once headed the MAG corps. "It is irresponsible", Netanyahu said.
"We need to do everything we can to prevent repeating these mistakes", he added.
The sudden coalition crisis was sparked by the resignation of the hawkish Lieberman, who had demanded a far stronger response last week to the most massive wave of rocket attacks on Israel since the 2014 Israel-Hamas war.
After Lieberman's withdrawal, Netanyahu's government was left clinging to a one-seat majority in the 120-seat parliament.
Israel's government appears to have survived a possible collapse after a key partner withdrew a threat to leave the coalition and force snap elections.
Bennett had threatened to bring down the government if he was not appointed defence minister, a portfolio Netanyahu gave to himself on Sunday.
"He told me that even though according to game theory, continuing to push to be defense minister makes the most sense, the country should come first", Bennett said.
"I know I'll pay a political price - not the end of the world, you win some, you lose some", Bennett said.
Axios reported the so-called peace team has been readying the content for weeks, and the meeting was scheduled a month ago.
3 killed, 10 injured in blast at Nirankari Bhawan in Amritsar
Punjab Chief Minister Amarinder Singh announced Rs 5 lakh each as ex-gratia to the kin of those dead. The father of a woman said she was threatened by two men with a gun at Amritsar's Nirankari Bhawan.
"The meeting between the finance minister and the prime minister ended without results", the spokesman said in a statement. "I saw the lack of spirit".
"In his speech, he promised the Israeli public to 'change course, lead a revolution in the security apparatus, in order to change the direction of the past ten years in the direction of regaining power, '" Bennett said, suggesting: "If the government takes the right path and act as a true rightwing government - it's worth a try".
"The ship of security of the State of Israel has been sailing in the wrong direction in the past decade", Bennett stressed, "and the most unsafe thing for the State of Israel would be that we begin to think that there is no solution to terrorism, to terrorists, to missiles".
Netanyahu met Bennett on Friday, but conflicting reports emerged.
On the coalition side, the ultra-Orthodox parties, Shas and United Torah Judaism received 6 and 7 seats respectively, Liberman's party, Yisrael Beytenu, received 7 seats, Bennett's Jewish Home 11 seats, and Kahlon's Kulanu party 8 seats. "Gen. Sharon Afek, is working tirelessly to provide the IDF with the legal framework necessary to exert its military might to defeat our enemy, while complying with the provisions of the law", Mandleblit's office said in a statement. When a truce was reached through United Nations and Egyptian mediation on Tuesday, Lieberman blasted the deal as "capitulation to terror" and quit.
He also slammed Netanyahu's recent decision to allow Qatar to send millions of dollars in aid to the blockaded Palestinian enclave.
A week ago, Israel and Hamas were on the brink of a large-scale conflict after Hamas fired more than 400 rockets and mortars at Israel, while the IDF retaliated by sending its warplanes to bomb around a hundred sites in Gaza.
Most opinion polls show Netanyahu easily securing re-election, which would secure him a place in Israeli history as the country's longest serving leader.
A national poll was due in November 2019.
The research found that Netanyahu's false remarks on Iran were considered as credible by 88 percent of readers and viewers in Israel.