(AFP) -- The non-binding vote by the party's decision-making committee called on its MPs "to spread Israeli sovereignty over Judea and Samaria (the West Bank)".
Netanyahu, who is a member of the central committee, was not present for the vote.
The prime minister says he still supports a "two-state" solution with the Palestinians, although he has also pushed for Jewish settlement expansion in the West Bank, which has been under Israeli occupation for 50 years.
Israeli settlements are deemed illegal under international law and widely seen as the main obstacle to peace.
More than 600,000 Jewish settlers live in the occupied West Bank and annexed east al-Quds among 2.9 million Palestinians, with frequent outbreaks of violence.
Likud's central committee counts around 3,700 members, and according to Israeli media some 1,500 were present for Sunday's vote.