ALSO READForeign agents blamed for death of two protesters Iran warns protesters will 'pay the price' after third night of unrest Iran's Rouhani backs people's right to protest Iran President Hassan Rouhani declares end of Islamic State, thanks martyrs Middle Eastern chaos gives Netanyahu cover to take Israel wherever he likes
"I wish the Iranian people success in their noble quest for freedom," Netanyahu said in a YouTube video published on Monday.
"I heard today Iran's President Hassan Rouhani's claim that Israel is behind the protests in Iran. It's not only false. It's laughable. And unlike Rouhani, I will not insult the Iranian people. They deserve better," Netanyahu said.
Netanyahu also criticised European governments for not being supportive enough of the protests.
"Sadly, many European governments watch in silence as heroic young Iranians are beaten in the streets. That's just not right. And I, for one, will not stay silent," he said.
Iranian President Hassan Rouhani has called for unity as his government deals with the ongoing violent protests across the country that has left 12 people dead.
Rouhani on Monday urged Iran's political and military forces to speak with "one voice to ensure the survival of the political system, national interest, and stability of our country and the region" after a protester reportedly killed one officer and injured three others after opening fire on them in Najafabad.
On Sunday, Rouhani said the people of Iran were free to protest peacefully, but rejected protesting by violence.
"Our great nation has witnessed a number of similar incidents in the past and has comfortably dealt with them. This is nothing," CNN quoted Rouhani as saying in a meeting with Iranian members of parliament on Monday.
Iran is still witnessing a wave of demonstrations, which are being held in many cities across the country as people took to raising anti-government slogans, over alleged corruption and rising prices that have plagued the people of the country earlier in this week.
Scores of protesters have been arrested in the last few days.
The outbreak of unrest reflects the growing discontent over rising prices and alleged corruption by the government, as well as concern over the country's costly involvement in regional conflicts such as Syria and Iraq.