To become law, the bill, which could yet be amended, must be approved by the Senate and Polish President Andrzej Duda.
"The timing of the bill - the eve of International Holocaust Remembrance Day - was particularly surprising and unfortunate".
"The law is baseless". Historians say many Poles collaborated with the Nazis and committed heinous crimes.
"History can not be changed, and the Holocaust must not be denied", Netanyahu said.
The Holocaust "was conceived in Germany but hundreds of thousands of Jews were murdered without ever meeting a German soldier", Yair Lapid, chairman of the opposition Yesh Atid party and the son of a Holocaust survivor, wrote on his Twitter account.More news: Swedish IKEA founder Kamprad dies at 91
It said: "There is no doubt that the term "Polish death camps" is a historical misrepresentation". Beata Mazurek, spokeswoman for Poland's ruling Law & Justice party and deputy speaker of lower chamber of parliament, ruled out any amendments to the law.
"Yad Vashem will continue to support research aimed at exposing the complex truth regarding the attitude of the Polish population towards the Jews during the Holocaust", the organization vowed.
But Polish Prime Minister Mateusz Morawiecki rebuffed criticism of the proposed law, saying that the terms "Auschwitz-Birkenau" and "Arbeit Macht Frei" are "not Polish."
"However, restrictions on statements by scholars and others regarding the Polish people's direct or indirect complicity with the crimes committed on their land during the Holocaust are a serious distortion", it said.
January 27th marks the 73rd anniversary of the liberation of the Auschwitz - Birkenau concentration camps in then Nazi-occupied Poland, and while it was designated by the United Nations as a day of remembrance, the main Holocaust Memorial Day is in April marking the anniversary of the Warsaw Ghetto uprising.
Throughout the occupation, Poles fought back through underground movements and resistance armies. The capital Warsaw was razed to the ground in 1944 after a failed uprising in which 200,000 civilians died. "Poland's new law is especially objectionable as it stifles any real confrontation with the most chilling aspect of the country's wartime history - the extent to which local Poles were complicit in the destruction of their Jewish neighbors", he continued.More news: Prince Harry makes solo private wildlife conservation visit to Africa
A memorial at the site of the 1941 massacre of Jews in Jedwabne, Poland.
The bill hits at Poland's fight for its own legacy. The White House later apologized.
Nazi Germany established the main hubs of their extermination machine on Polish territory, including the largest concentration camp, Auschwitz, and the three primary extermination camps: Treblinka, Sobibor, Belzec and Chelmno. They tried to pass a bill in 2013 and failed. After a massive right-wing march through Warsaw in November, with banners and chants of "white Europe" and "pure blood", some government officials defended the event as a simple independence day rally.
"Important Israeli politicians and media are attacking us for the bill".
"I understand his anger, but Lapid fell in the trap that the Poles made for him, in a sense", Zuroff said. "Also among the Polish people, there were those who aided the Nazis in their crimes".More news: The Potentially Life-Saving Feature Added in iOS 11.3