During remarks at the beginning of the weekly cabinet meeting, Netanyahu said his discussions with US President Donald Trump and other officials in Washington last week focused mainly on Iran, Xinhua news agency reported.
"I said that the nuclear agreement with Iran contains within it many dangers for the world, including the special danger of the nuclearisation of the Middle East," Netanyahu said, according to an statement.
"Many countries in the Middle East are saying that they are also allowed to enrich uranium if Iran is allowed to do so; therefore, the way to prevent this danger, the nuclearisation of the Middle East, is to either thoroughly correct the agreement or abrogate it," he said.
Netanyahu reportedly referred to Saudi Arabia, which is in talks to buy nuclear reactors from the US.
In January, Trump announced that he will waive sanctions against Iran and extend the nuclear deal after he disavowed the deal three months earlier.
Israel is widely believed to hold hundreds of nuclear warheads, which the country has never officially acknowledged to exist.
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