In a direct contrast to claims made by US President Barack Obama who hailed the agreement as opening a "new path toward a world that is more secure," Netanyahu addressing his colleagues at the weekly Cabinet meeting claimed that the world has become more dangerous as a result.
"What was agreed last night in Geneva is not a historic agreement, it is a historic mistake," the hawkish Israeli Premier said.
"Today the world has become much more dangerous because the most dangerous regime in the world took a significant step to getting the most dangerous weapon in the world," he added.
Capping four days of negotiations, representatives of the P5+1 group of nations - the US, the UK, Russia, China, France and Germany - reached an agreement with Iran in the early hours in Geneva. The deal was formally announced by Catherine Ashton, the EU's foreign policy chief.
For the first time, he said, the leading powers of the world agreed on uranium enrichment programme in Iran, while removing sanctions that it has taken years to build up in exchange for "cosmetic Iranian concession that are possible to do away with in a matter of weeks".
Arguing that the deal threatens many countries, including Israel, Netanyahu reiterated that "Israel is not obligated by the agreement".
"Iran is committed to Israel's destruction, and Israel has the right and the obligation to defend itself by itself against any threat," he said.
"I want to make clear as the Prime Minister of Israel, Israel will not allow Iran develop a military nuclear capability," the Israeli leader emphasised.
However, despite the tough talk against the deal, Israeli ministers and officials were reluctant to issue any threats of a unilateral military action against Iran to foil its nuclear ambitions.
Israel has dubbed the Iranian nuclear programme an "existential threat" vowing to not let it succeed "keeping all options open on the table".