Under the terms of the annex to the peace deal, the lease would be extended automatically unless one party gave notice a year before the lease ended, leading to talks on the matter.
Reacting to the Jordanian announcement, Mr Netanyahu said that the whole peace deal between Israel and Jordan was “important and valuable to both countries”.
King Abdullah has been under pressure from Jordanian MPs and the Jordanian public not to renew the lease for the two areas. Eighty-seven Jordanian MPs have signed a petition urging an end to the lease.
Last Friday protesters in the Jordanian capital Amman called for the lease to be ended and campaigns have also taken place on social media.
It follows recent strains in the relationship between Jordan and Israel over issues including the status of Jerusalem and the lack of progress on a peace deal between Israel and the Palestinians.