"There is no other leader who has done what Netanyahu has done, and he has done and will do what no one in the Labor Party has ever dared to do," Ben-Simon said at a cultural event in Beersheba.
However, Netanyahu's office dismissed Ben-Simon's statements.
"Netanyahu never said the things attributed to him, neither to a political official nor to anyone else," a statement by the PM's Office said.
MK Ben-Simon himself later retracted parts of his speech, saying "these things were said according to my view, and were not a direct quote from an interview with the prime minister."
Earlier, Ben-Simon said that the prisoner exchange deal for the soldier kidnapped by Hamas "has been stuck for three years because (former Prime Minister Ehud) Olmert didn't want to pay the price".
Ben-Simon said Netanyahu had also made progress on negotiations with Syria. "An accord with Syria also exists, and only needs to be signed," he said. "I have to give him credit."
The Labor MK added that Tanzim leader Marwan Barghouti, who was sentenced to four life sentences in Israel after being convicted of murder, was likely to go free as a result of the deal.
"He is on the lists, and maybe in a few years Israel will sit before him," Ben-Simon said, referring to the possibility that Barghouti would be released in order to become a Palestinian leader and preside over peace negotiations in the future.
"The (leader's) chair purifies the past and future. The argument is over how to block Hamas and recruit a leader in the (Palestinian) territories, and there is an argument over whether he should become a leader or not. There are debates on whether to place him in Ramllah or to send him off for a cooling period abroad," he said.
"Barghouti is an abject murderer who should rot away in prison. I hope he is not in the deal being cooked up," Aharonovitch said, and requested that the public "leave names aside, because we are not there yet".