"We view the nuclear talks in Geneva with hope and with concern. We see the worrying signs and we don't want Geneva 2013 to turn into Munich 1938," International Relations Minister Yuval Steinitz said in remarks broadcast by Israel's army radio.
Steinitz was alluding to the 1938 Munich agreement under which Britain and France agreed to the annexation of large swathes of then Czechoslovakia by Nazi Germany in a failed bid to avert war.
The Geneva talks, which began yesterday, ended a six-month freeze in dialogue sparked by Iran's refusal to curb uranium enrichment in exchange for easing the punishing international sanctions that have battered its economy.
The P5+1 and Israel, Iran's archfoe, fear that Tehran's atomic programme is a disguised effort to develop nuclear weapons capability, a claim it denies vehemently.
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Steinitz said Israel was "not closing the door on a diplomatic solution," but Israeli leaders have stressed that they will still use military force against Iran if it is necessary to prevent it developing nuclear weapons.
Israel wants Iran to stop enriching its own uranium, a process required for obtaining nuclear fuel but which is also a step towards manufacturing a nuclear warhead.
Prime Minister Benjamin Netanyahu yesterday urged world powers to avoid a partial deal with Tehran which could see a relaxing of sanctions, saying Israel reserved the right to carry out a unilateral military strike to prevent Iran getting the bomb.
"Pre-emptive strikes must not be ruled out," he told the Israeli Knesset (parliament).
Netanyahu has repeatedly attacked Iran's new President Hassan Rouhani, who has made diplomatic overtures to the West, as a "wolf in sheep's clothing," saying he is no different from his belligerent, Holocaust-denying predecessor Mahmoud Ahmadinejad.
Israel is the Middle East's sole if undeclared nuclear-armed power.