The visit - the first ever by an Israeli leader to the nearby island nation - was also a testimony to warming ties that have emerged from political and economic turmoil, as well as new economic prospects. It followed a succession of reciprocal visits by senior officials from both countries and several low-level agreements.
Netanyahu's office said the one-day visit "was designed to strengthen the improving ties between the two nations." The two sides will discuss cooperation in energy matters, agriculture, health and maritime research, and sign a disaster relief and a search and rescue agreement, it said.
"It's a natural relationship for us," Netanyahu said at the start of his meeting with Greek Cypriot leader Dimitris Christofias.
Cyprus government spokesman Stefanos Stefanou told The Associated Press beforehand that the visit "illustrates the great dynamic driving forward the improvement in relations between the two countries."
Although Cyprus is only a 50-minute flight away from Tel Aviv, ties between Israel and Greek Cyprus have long been chilly.
Greek Cypriots backed the Palestinians in their quest for an independent state and looked on warily as Israel built military and trade relations with regional powerhouse Turkey, which doesn't recognize Greek Cyprus as a sovereign state.
But Israel's relations with Turkey have deteriorated dramatically, while Greek Cyprus has been looking to cement ties with neighbors as a bulwark against Ankara's growing regional influence. Also, Greek Cyprus can't rely as before on top ally, Greece, which is grappling with crushing financial problems.
Another potential bridge between Israel and Greek Cyprus is the discovery of huge offshore natural gas deposits in the Mediterranean Sea. The same US company, Noble Energy, is leading the exploration efforts in both countries.
Turkey, however, has threatened the finds. It opposes any Greek Cypriot oil and gas search that denies Turkish Cypriots in the north of the divided island what it contends is a rightful claim to gas wealth. And it has dismissed a Greek Cypriot-Israeli deal demarcating their maritime borders as null and void.
Last year, Ankara dispatched a warship-escorted research vessel to look for fuel in waters off Cyprus' southern coast, provoking Christofias to demand the Turks abandon their "gunboat diplomacy."
Cyprus was split into an internationally recognized Greek-speaking south and a Turkish-speaking north in 1974 when Turkey sent troops following a coup by supporters of union with Greece.
Until recently, Turkey was Israel's strongest ally in the Muslim world but those ties frayed badly over Palestinian casualties during Israel's 2009 war in the Gaza Strip. Relations took another blow after Israeli commandoes killed nine Turks aboard a Turkish-led flotilla that tried to breach Israel's naval blockade of Gaza in May 2010.
The rupture with Turkey and the toppling of Egypt's longtime leader Hosni Mubarak made Israel more vulnerable in a region already hostile to the Jewish state and forced it to look for other alliances.
"There is no doubt that the loss of Turkey pushed Israel in the direction of Greece and Cyprus," said Alon Liel, a former director of Israel's foreign ministry and one-time envoy to Turkey. "With Cyprus it has become more significant because of the gas."
Energy security is a strategic concern for any country, but Israel has other interests in courting Greek Cyprus, said Tim Potier, political analyst and law professor at the University of Nicosia.
"Israel is looking to strengthen bonds with a fast-dwindling list of friendly neighbors as one-time regional friends and allies have turned into potential rivals amid the tumult of the Arab Spring," Potier said. "Cyprus' EU membership, proximity and own gas wealth potential make the island a natural ally for an increasingly isolated Israel."
Stefanou said Greek Cypriot-Israeli energy cooperation is a key aspect to budding relations, but that there are others, including defense. He said the EU member island's strong links to Arab countries could "act to promote dialogue" with Israel.
But Liel also said the growing Israel-Greek Cyprus alliance could hurt Israel by driving Turkey even further into the camp of Hamas militants who rule Gaza.
"They (the Turks) see Israel aiding Cyprus and in return, they will want to aid Hamas," he said. "The Turks feel that if Israel is going toward Cyprus they will try to strengthen Hamas" by donating money to its government.