Israel PM inaugurates first light rail in protest-hit Tel Aviv
The long-awaited rail network will connect the coastal city's northeastern suburb of Petah Tikva with Bat Yam to the south, a distance of 24 kilometres (15 miles).
Thursday's ceremony went ahead without the presence of Tel Aviv Mayor Ron Huldai, who is part of the protest movement.
"I am delighted that this line is open, but I am part of the protest movement against the way the country is run," Huldai said in an interview with news website Ynet.
Despite scores of protesters rallying not far from the opening ceremony in Petah Tikva, Netanyahu called it "a day of celebration for Israel".
"Today, we are realising the transportation vision of Israel," he said.
The Red Line, as it is known, has 34 stations including 10 underground, and will officially open to the public on Friday.
Planned in 2013, the project cost 14 billion shekels (350 million euros).
It revived the debate of whether public transport should operate on Saturdays, the weekly day of rest in Israel known as Shabbat.
The line will not operate during Shabbat, which begins at sunset on Friday and lasts until nightfall on Saturday.
The ultra-Orthodox parties in Netanyahu's ruling coalition oppose any form of activity on Shabbat, from operating public transport systems to shops being open.
Two more lines are planned to serve greater Tel Aviv in addition to three metro lines due to begin operation from 2034.
More than 475,000 people live in Tel Aviv proper, and more than a million live in surrounding districts.
Tel Aviv's light rail system arrives at a time when the city has become the hub for protests against Netanyahu's government, which is ramming through a controversial overhaul of Israel's judiciary.
Since the government unveiled the reform package in January, tens of thousands of Israelis have joined weekly demonstrations on Saturdays in the city.
It is the largest protest movement in Israel's history, and one that has split the nation.
Last month, parliament voted to limit the so-called "reasonableness" law that curbs judicial review by Israel's top court of some government decisions. Critics fear this could pave the way for more authoritarian government.
Netanyahu's coalition, which includes far-right as well as ultra-Orthodox Jewish parties, argues that such reforms are necessary to rebalance the relationship between elected officials and the judiciary.
Opponents accuse Netanyahu, who has been fighting corruption charges in court, of a conflict of interest, which he denies.
The amendment to the "reasonableness clause" is the first major component of the reform package to become law.
Other proposed changes include allowing the government a greater say in the appointment of judges.