The Prime Minister stressed she recognised Israel’s right to self-defence, but called on Mr Netanyahu to take action to alleviate the situation.
The Israeli prime minister insisted the protests were driven by militant group Hamas and the response was aimed at minimising causalities.
The pair are also at odds over the Iran nuclear deal.
Mrs May restated the UK’s commitment to the agreement, which Israel opposes and US president Donald Trump has pulled out from.
Rival groups of protesters gathered outside Downing Street waving Palestinian and Israeli flags ahead of Mr Netanyahu’s arrival to meet the Britsh PM this afternoon.
Mrs May told him the UK was “concerned about the loss of Palestinian lives” in the recent Gaza protests.
She said the UK “absolutely recognises” the right that Israel has for self-defence against the activities of “extremists and terrorists”.
“But with 100 Palestinian lives lost and a deteriorating situation in Gaza I hope we can talk about how we can alleviate that situation and how we can ensure that we can get back to a position where we are able to find a way through to talk about a two-state solution,” she said.
Mr Netanyahu insisted protesters were being “paid for and pushed by Hamas” to try to break through the border and kill Israelis.
“This is not a non-violent protest, quite the contrary,” he said.
“We are doing everything we can to both minimise casualties and at the same time protect Israeli lives.”
Mr Netanyahu has lobbied for European leaders to follow Mr Trump’s example and pull out of the Joint Comprehensive Plan of Action (JCPOA) Iran deal.
But Mrs May said: “Along with France and Germany, the UK continues to believe that is the best route to preventing Iran from getting a nuclear weapon.
“We will remain committed to it as long as Iran meets its obligations.
“But we do recognise that there are other issues that need to be addressed in relation to Iran – its destabilising regional activity in countries like Syria and Yemen and also the the proliferation of ballistic missiles.”
Mr Netanyahu told Mrs May he was focused on making sure Iran did not get a nuclear weapon and “how to roll back Iran’s aggression in the region”.
“I think we can find ways to work together to achieve both goals,” he said.