"The dangerous accord which is being negotiated in Lausanne (Switzerland) confirms our concerns and even worse," Netanyahu said in remarks at a meeting of his cabinet broadcast on public radio.
Netanyahu denounced the "Iran-Lausanne-Yemen axis which is dangerous for all of humanity and which must be stopped," making a reference to the Swiss city where the talks are taking place.
The premier warned that Iran could be in a position to "conquer" the Middle East through what he called the "axis" of control it has over the capitals of Iraq, Lebanon and Syria.
Netanyahu angered the White House when he addressed a joint session of the Congress to warn against a nuclear deal with Iran in the lead-up to Israel's March 17 general election.
Negotiations to rein in Iran's disputed nuclear programme look set to go down to the wire in Lausanne with only three days left until a deadline for the outlines of a deal.
His comments came as Gilad Erdan, a member of Netanyahu's Likud party, said the "Congress could be the last obstacle to lifting of the sanctions against Iran" once any accord is concluded.
Intelligence Minister Yuval Steinitz also criticised the possible conclusion of a "bad deal full of loopholes", adding that Israel was not alone.
"Very serious doubts also exist in the United States, Europe, France and Britain," Steinitz, a close ally of the prime minister, said on public radio.
But Nachman Shai, a lawmaker from the opposition Labour party, criticised Netanyahu's approach.
"We suffered a defeat in this case and the result is bad for Israel, which has failed to curb Iran's nuclear programme," Shai told public radio.
Israeli President Reuven Rivlin on Wednesday formally tasked Netanyahu with forming the next government after his rightwing Likud party scored a surprise election victory.
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