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The International Criminal Court is also looking into issuing arrest warrants for three senior Hamas leaders, a move US president Joe Biden slammed as outrageous, saying there is "no equivalence" between Israel and Hamas.
Israel's prime minister has reacted angrily to an announcement that the ICC is seeking an arrest warrant against him.
The International Criminal Court's (ICC) chief prosecutor, Karim Khan, said there were reasonable grounds to believe that Benjamin Netanyahu and Israeli defence minister Yoav Gallant were responsible for alleged war crimes and crimes against humanity in Gaza.
"This is exactly what the new antisemitism looks like, it has moved from the campuses in the West to the court in The Hague. What a shame," Israel's leader said in a television address.
The ICC is also looking into issuing arrest warrants for three senior Hamas figures, including the group’s leader in Gaza Yehya Sinwar on similar charges,
This comparison appeared to enrage Netanyahu.
"With what audacity do you dare compare the monsters of Hamas to the soldiers of the IDF, the most moral army in the world?" he asked, directing the question to Karim Khan.
"With what audacity you compare between the Hamas that murdered, burned, butchered, raped, and kidnapped our brothers and sisters, and the IDF soldiers who are fighting a just war that is unparalleled in morality that is unmatched."
Netanhayu's outrage was echoed by Israel’s president Isaac Herzog who said the ICC announcement was "beyond outrageous".
"This one-sided move represents a unilateral political step that emboldens terrorists around the world and violates all the basic rules of the court according to the principles of international law," he said.
In a written statement, US president Joe Biden also called the decision outrageous and said there was "no equivalence" between Israel and Hamas.
The US State Department said the ICC has no jurisdiction to investigate this case, as Israel is not a signatory to the Rome Statute that founded the court and therefore does not recognise its authority.
Israel was referred to the Netherlands-based court in November by five ICC members; South Africa, Bangladesh, Bolivia, Comoros and Djibouti.
They asked the court to look into possible crimes of genocide, crimes against humanity and war crimes committed by Israeli forces during their war against Hamas
The ICC has no enforcement mechanism of its own and instead relies on the support of member states to carry out arrests.
Last year, Russian president Vladimir Putin cancelled a trip to South Africa to attend the BRICS summit which many saw as a reaction to Pretoria's obligation to arrest him. The ICC issued an arrest warrant for Putin in March last year on war crimes charges.
Mixed reactions
There was a mixed reaction to the news on the streets of Tel Aviv, the city that has seen weeks of mass anti-government protests.
Protesters are demanding that Netanyahu's administration does more to secure the release of the hostages still being held by Hamas in Gaza.
They also accuse him of prolonging the war to keep himself in power.
"I want the hostages to return alive, as soon as possible. If this arrest warrant, or an arrest that will follow it, will expedite it, I am in favour of it," said Israeli citizen Gal Sne.
But another criticised the move.
"I don’t understand in what world we are living in where there is symmetry between leaders of a terror organisation who committed mass slaughter to heads of state who were elected in a democratic way," said Inbar Goldstein.
There was a muted response to the ICC announcement among Palestinians in central Gaza.
"We want international resolutions that are decisive. Decisive so that they solve matters and problems. We are the victims although we have nothing to do with Israel or Hamas. What is my guilt or my children's guilt? This is not fair, for God's sake," said Sami Abu Zeid.
Amongst other alleged crimes, a statement issued by the ICC accused Netanyahu of using starvation of civilians as a method of warfare and "intentionally directing attacks against a civilian population as a war crime".
ICC judges will now examine the evidence and decide whether arrest warrants can be issued.
