JERUSALEM—Prime Minister Benjamin Netanyahu said the new war plan approved by Israel’s security cabinet includes dismantling Hamas in Gaza’s central refugee camps in addition to Gaza City, a broadening that comes as he faces criticism internationally for expanding the war and from the far-right wing his coalition for not going far enough.

Israel says it plans to take over Gaza City in another escalation of its 22-month war with Hamas. The decision, taken after a late-night meeting of top officials, came despite mounting international c