The two prime ministers spoke over the telephone Wednesday, reports newspaper Berlingske, citing anonymous Danish and Israeli sources.
Netanyahu wished to express his displeasure at Danish state support for a number of Palestinian organisations, according to the report.
Neither Denmark nor Israel has officially confirmed that the conversation took place.
Last week, Netanyahu asked Danish foreign minister Anders Samuelsen to scrap Denmark's support for Palestinian organisations during an official visit by the latter to Jerusalem.
READ ALSO: Danish bus ads on Israeli settlements halted
After that meeting, Samuelsen signed a pre-arranged partnership agreement with Palestinian prime minister Rami Hamdallah promising 450 million kroner ($6.8 million) to several Palestinian organisations over the next five years.
“Our support will go to the building of institutions and ensuring transparency. We are monitoring to make sure that the money goes to that and not other things,” Samuelsen told Berlingske following the ceremony in Ramallah at which the deal was signed.
The conversation between the two prime ministers had been postponed several times prior to Wednesday, according to Berlingske.
Netanyahu's spokesperson, Ofir Gendelman, told the newspaper that the Israeli government regards the hate speech, anti-Israel rhetoric and support for boycott Israel movement BDS of the organisations in question as the biggest obstacles to peace in the region.
Several organisations that will receive the Danish donor money support the international boycott movement as well as promote ideas that do not align with the two-state solution for Israel and Palestine that is officially supported by Denmark's government, Israel's NGO Monitor organisation told Berlingske.
Rasmussen also faced domestic pressure this week when critics called him "historically weak" after a U-turn on a key government policy on retirement age due to his party's lack of parliamentary support over the issue.