Netanyahu said the Jewish state shared US President Barack Obama's "preference" to pursue diplomacy "but for diplomacy to succeed, it must be coupled with powerful sanctions and a credible military threat."
"A diplomatic solution is better than a military option but a military option is necessary for diplomacy to succeed as a powerful sanction because of the pressure," he told a forum hosted by the Saban Center for Middle East Policy at the Brookings Institution, a Washington think tank.
The interim six-month accord struck in Geneva on November 24 aims to build trust and buy time to resolve the years-long standoff with the West.
Without the prospect of a military option, sanctions "will begin to unravel" in the wake of last month's deal, Netanyahu said via video link.
"Steps must be taken to prevent further erosion of the sanctions because ultimately the sanctions remain an essential element of the international effort to compel Iran to dismantle its nuclear military infrastructure, to take apart all its centrifuges," he said.