"It has not yet crossed the red line which I laid out in the United Nations but it is systematically approaching it and we cannot let it cross," he told senior members of his Likud-Beitenu political alliance in remarks broadcast on public radio.
In a September speech to the UN General Assembly Netanyahu described Iran's progress in uranium enrichment and drew a red line referring to the point at which Israel believes its arch foe would be able to build a nuclear bomb.
In a visit to Israel last week US Defence Secretary Chuck Hagel vowed an "ironclad" committment to the Jewish state's security, citing the planned multi-billion dollar sale of advanced US aircraft and missiles.
He also insisted there was no serious rift between American and Israeli leaders over how to prevent Iran from attaining a nuclear weapons capability.
Israel, believed to be the Middle East's sole if undeclared nuclear power, has refused to rule out a pre-emptive military strike on Iran's nuclear facilities, which the Islamic republic says are for peaceful purposes.
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