The Human Rights Council is nearing a vote on the report which accuses Israel and Hamas militants of war crimes.
Mr Netanyahu said the Goldstone report would "deal a fatal blow to three major issues".
Firstly, he said, it would legitimise terrorists who hide behind civilians" by laying the blame on victims of terror who act in self-defence.
He also said UN prestige would be adversely affected and the body would become irrelevant like "the darkest days where absurd decisions were passed".
"The most pressing issue," he said, "[was that] promoting the conclusions of the Goldstone report will devastate the peace process."
"Israel will not be able to take further measures, and will forbear taking further risks for the sake of peace, if Israel is denied its right for self-defence," he said.