Netanyahu said the refusal of service was "a contradiction to democracy" and "threatens to do away with Israel's security."
"In our democracy, the incitement to refusals directly endangers the security of all the citizens of Israel," he said. "They eat away at the deterrence of our enemies, who easily can be tempted to acts of aggression against us and they destabilize discipline within the army, which is the basis of the army's existence in the first place."
Demonstrators have said the judicial reforms would drastically weaken the independence of the courts, with protesters clashing with police outside the Senate last week in a recent flare-up of tensions during a reading of the bill.
Netanyahu said Monday that while he is "attentive" to the objections of the protesters, no government could "accept such a dictate and it is the destruction of democracy."
"There can't be a group within the army that threatens the elected government 'if you don't do as we desire, we'll flip the switch on [Israel's] security,'" he said.
The reservists protesting the judicial reforms, called Brothers in Arms, urged Defense Minister Yoav Gallant to join them in pushing against the proposed law and said they will not back down from their protests.
"The prime minister is beginning to internalize the magnitude of an event in which thousands of reservists won't let him turn Israel into a dictatorship and eliminate the people's army," the group said.
"We swore to serve the kingdom, not the king," they added.
A Cabinet meeting was postponed from Sunday as Netanyahu, 73, was hospitalized overnight for treatment of dehydration. He was discharged with a Holter monitor, a type of portable electrocardiogram for cardiac monitoring.
On Monday, he told the Cabinet his health was "excellent" but didn't clarify.
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