"The international community should not fall into wishful thinking and be tempted to ease pressure on Iran to stop its nuclear programme," Netanyahu said at the start a meeting of his cabinet.
"Iran will be judged on its actions," he said a day after Hassan Rowhani, a moderate cleric and former top nuclear negotiator, was declared the winner of Iran's presidential election.
"If it insists on continuing to develop its nuclear programme the answer needs to be clear -- stopping its nuclear programme by any means," Netanyahu said.
Intelligence Minister Yuval Steinitz said although Rowhani won the support of reformists, it was still supreme leader Ayatollah Ali Khamenei who called the shots.
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"The working assumption should be that Khamenei, who has been heading this (programme) for 24 years, will continue to head it and therefore without continued pressure on Iran there is no chance of seeing significant change in nuclear policy," said Steinitz.
"Rowhani doesn't consider himself a reformer, he defines himself as a conservative. He was... Khamenei's representative to the National Security Council," he told army radio.
It also charges Tehran with aiding Lebanon's Shiite Hezbollah movement and the Palestinian militant group Hamas, both bitter enemies of the Jewish state.
Justice Minister Tzipi Livni preferred to reserve judgement on Rowhani.
"The test will be in his actions," she said on army radio. "It is impossible to know today."
"The Iranians now have a moderate face but if it emerges that in substance he is also a more moderate man, and if what truly happened is that the Iranian people want more moderation and if there is also pressure to have better relations with the West, then the test will move to the West."
"Rowhani is an ideal candidate to spearhead a new initiative to wrest Iran from its debilitating battle with the international community over the nuclear issue," she said in a blog ahead of the Iranian poll.