A global interim agreement to halt Iran's nuclear programme, which went into force Monday, will not stop Tehran trying to develop a military atomic capability, Israel's prime minister said.

Addressing parliament just hours after the deal took effect, Benjamin Netanyahu said the Geneva agreement did not go far enough, and urged the world to seek a complete halt to the "Iran nuclear train" in the planned permanent arrangement.

"The interim agreement which went into force today does not prevent Iran from realising its intention to develop nuclear weapons," he said in a special session also addressed by Canadian Prime Minister Stephen Harper.

"This objective is still before us."

His remarks were after the UN's atomic watchdog confirmed Tehran had halted production of 20 percent enriched uranium in line with an interim deal between Iran and the P5+1 group of world powers in Geneva in November.

In exchange for Iran's partial nuclear freeze, the European Union and the United States began suspending some of the crippling sanctions which have been imposed on the Islamic republic.

But Harper said Canada's sanctions on Tehran would stay "fully in place".

"We truly hope that it is possible to walk the Iranian government back from taking the irreversible step of manufacturing nuclear weapons. But for now, Canada's own sanctions will remain fully in place," he said.

"Should our hopes not be realised, should the present agreement prove ephemeral, Canada will be a strong voice in the world for renewed sanctions."

Under the deal, Iran agreed to roll back parts of its nuclear programme for six months in exchange for modest sanctions relief and a promise not to impose new sanctions.

Israel, widely seen as the Middle East's sole if undeclared nuclear power, strongly opposed the Geneva agreement, saying it would offer Iran the "deal of the century."

Implementation of the landmark interim deal also started the clock on negotiating a trickier long-term accord to end the nuclear standoff and avert a possible war with Iran.

World must stop 'Iran nuclear train'

Netanyahu compared Iran's bid for a nuclear weapon to a train which needed to pass three stops en route to obtaining a military capacity: enriching uranium to 3.5 percent; enriching to 20 percent; and a "final stop" of enriching to the weapons-grade level of 90 percent.

"The Geneva agreement cancelled the 20 percent stop but left the train on the track and even permits Iran to upgrade and improve the engine, so that one day, Iran will be able to rush forward to the final stop, in a short time and on an express track, without slowing down for the interim stops," he said.

"In a permanent agreement, the international community must get the Iranian nuclear train off the track. Iran must never have the ability to build an atomic bomb."

Netanyahu has said a nuclear Iran would pose an existential threat to the Jewish state and has refused to rule out military action to prevent it from achieving that end.

World powers must also demand that Iran end its calls for the "destruction" of the Jewish state, Netanyahu added.

"The time has come that the international community, which has been making things easier for Iran and giving it legitimacy of late, also demand that it halt its calls for the destruction of Israel and stop funding terror organisations: Hamas, Hezbollah and Islamic Jihad," he said.

Tehran has a long history of belligerent statements towards Israel and supports its foes, the Palestinian Islamist movement Hamas and Islamic Jihad, and Lebanon's Shiite militant group Hezbollah.

Israel and many in the international community suspect Iran of using its civilian nuclear programme as a cover for developing a bomb, a charge which Tehran strongly denies.