"I think the opposite should be done," he told CNN's "State of the Union" program, ahead of a new round of talks in Geneva between world powers and Iran beginning November 20.
"I think you should increase the pressure, because it's finally working," the Israeli leader said.
"If you give it up now, when you have that pressure, and Iran doesn't even take apart, dismantle one centrifuge, what leverage will you have when you've eased the pressure?" said Netanyahu. "It just doesn't make sense."
Israel and Western powers suspect Iran's uranium enrichment program is part of a covert drive to acquire a nuclear weapons capability, an allegation the Islamic republic vehemently denies.
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Tehran has been in talks over its disputed nuclear program with the P5+1 group, which is made up of the five permanent members of the UN Security Council -- Britain, China, France, Russia and the United States -- plus Germany.
Backers of the deal blamed France for scuppering the accord, in which Iran would have given the West guarantees that it is not acquiring atomic weapons in exchange for an easing of crippling economic sanctions against the Islamic republic.
Netanyahu today said that Secretary of State John Kerry is to visit Israel on Friday to discuss the Iranian nuclear talks and peace with the Palestinians.
Netanyahu said he would also discuss the Iran talks with French President Francois Hollande, who arrives in Israel today, as well as with Russian President Vladimir Putin when he travels to meet him in Moscow on Wednesday.
Despite Israeli's disagreements with it allies, Netanyahu told CNN that they all share one one major overlapping interests -- a desire for peace.
"Unfortunately, with the proposed deal, they get to maintain that capacity. And I think that doesn't bode well for peace," he said.