Surrounded by heavy security, Netanyahu held a closed- door meeting with members of Argentina's Jewish community, estimated to be Latin America's most numerous with 300,000 members.
He also participated in a ceremony to remember victims of bomb attacks at the Israeli embassy in 1992, and at a Jewish community center in 1994.
The embassy attack killed 29 and injured 220, while the community center blast left 85 dead and 300 injured.
"Iran is the one that was behind of the great attacks in Buenos Aires in the 90s and is the 'octopus of terror,' and also Hezbollah that is sending branches (of terror) around the world, arms to Latin America as well," Netanyahu said, according to a transcript provided by the Israeli embassy.
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The Israeli leader, who arrived on Monday, said it is "an obligation for all countries of culture to fight against terrorism ... And in particular, against the Iranian terrorism system."
DAIA, an umbrella organization for the country's Jewish community, welcomed the visit and said it represented a "rapprochement between Argentina and Israel."
But some relatives of victims of the 1994 bombing refused an invitation to the Netanyahu event.
"Netanyahu did not come to commemorate the attack, but to increase business," said Diana Malamud, who heads a group called Active Memory.
"In these 23 years (since the bombing) Israel has been an observer, like any other country," and did not honestly help "search for the truth" behind the attack, she said.
"Not only is he himself accused of committing crimes against humanity in the International Criminal Court for killing civilians, bombing schools, hospitals and Palestinian mosques, but he provides protection to a repressor of the last Argentine dictatorship," Perez Esquivel said.
Esquivel was referring to Israel's refusal to extradite Teodoro Anibal Gauto, accused of committing crimes against humanity during Argentina's 1976-1983 military dictatorship.
Pro-Palestinian and left-wing demonstrators plan to protest today, when the Israeli premier meets Argentine President Mauricio Macri and Paraguayan President Horacio Cartes.