Speaking at a meeting with his Greek counterpart Antonis Samaras, Netanyahu maintained that Iran wanted "the relaxation of sanctions without the real cessation of Iran's programme to develop military nuclear capability."
"The Iranian regime seeks a partial agreement that will ease the sanctions; these sanctions have greatly hurt the Iranian economy," he said.
"The sanctions must be continued, they must be strengthened until the Iranian military nuclear programme is dismantled."
On Sunday, Netanyahu had called for the sanctions to "not be eased before reaching the goal of dismantling Iran's enrichment capability," saying they were "a moment away from achieving their goal."
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Netanyahu met US President Barack Obama last week at the White House for talks over Iran's nuclear drive, and then delivered an uncompromising speech on the topic at the UN General Assembly.
Samaras was in Jerusalem at the head of a delegation of ministers for the first Greek-Israeli government-to-government meeting, which "crowns the special and upgraded relationship that has developed between the two countries over the last three years," according to Israel's foreign ministry.
The two sides would sign a variety of bilateral agreements, the ministry said in a statement.
The United States and its allies suspect Iran of striving to develop nuclear arms under the cover of its civilian nuclear programme, a charge Tehran vehemently denies.
Iran's economy has been badly hurt by a series of UN and international sanctions imposed on the Islamic republic over the years for ignoring UN resolutions calling on it to halt its suspect uranium enrichment programme.
Its next round of talks with the so-called P5+1 -- the United States, Britain, France, China, Russia and Germany -- is scheduled to take place in Geneva on October 15 and 16.