"You have to dismantle their nuclear infrastructure and that means ... they will not have the capacity to enrich uranium," he said in a speech in Jerusalem, adding that any deal should also "bring in the prevention of ballistic missiles".
"The real deal that works is the deal which removes Iran's capacity to enrich uranium for nuclear weapons," the Israeli premier said.
"Iran will not have nuclear weapons," he added.
Western governments have long suspected Iran of pursuing a nuclear weapons capability, an ambition Tehran has consistently denied, insisting its programme is for peaceful purposes only.
Iran and the United States, which have been foes since the Islamic revolution of 1979, held a third round of nuclear talks mediated by Oman on Saturday.
Both Tehran and Washington reported progress in the talks, with a US official calling them "positive and productive" while Iranian Foreign Minister Abbas Araghchi said work would take place to "reduce the differences" between the sides ahead of another round of talks next week.
A 2015 accord between Iran and major powers that limited its nuclear activities in return for easing international sanctions effectively collapsed after US President Donald Trump abandoned it three years later.
Since returning to the White House, Trump has called on Iran to negotiate a new deal while threatening to take military action if it does not.
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