The current regime of US and EU sanctions against Iran is not enough to force Tehran to halt its nuclear programme, Israeli Prime Minister Benjamin Netanyahu said on Monday.

Although Western sanctions against the Islamic republic have been stepped up, Israel remains sceptical that Tehran will abandon its nuclear programme without harsh steps against its oil-based economy and its banking sector.

"As long as there won't be real and effective sanctions against Iran's petroleum industry and central bank, there will be no real effect on Iran's nuclear programme," Netanyahu told MPs at a parliamentary committee, with his remarks transmitted by a spokesman.

"The current sanctions employed against Iran harm the Iranians, but not in a way that could bring to a halt in the country's nuclear programme," he said.

"Without significant sanctions on the central bank and petroleum exports, Iran will continue to advance its nuclear plans."

Israel has made no secret of its desire to see crippling sanctions in a bid to halt Iran's nuclear programme, which world powers believe masks a weapons drive but which Tehran insists is for civilian energy and medical purposes alone.

A new nuclear site, that can produce 20-percent-enriched uranium, has started operations in a heavily defended bunker sunk into a mountain southwest of Tehran, according to the International Atomic Energy Agency.

The United States is seeking tough new sanctions against Tehran, including on its oil exports and financial institutions, prompting Iran to threaten to close the strategic Strait of Hormuz.

Netanyahu accused Iran of seeking to exploit the vacuum in the region following the departure of US troops from Iraq, thereby creating "a lack of stability" in the area, which was in turn forcing Israel "to strengthen (its) defence abilities against ground and air attacks."

"The caution we have taken until this point has proven itself," he said, adding that there is "an inherent explosiveness" in the situation.

On Sunday, Israel's Strategic Affairs Minister Moshe Yaalon said he thought Washington should be tougher on Iran.

"France and Britain understand that the sanctions must be strengthened, in particular against the Iranian Central Bank," Yaalon told public radio.

"The US Senate is also in favour, but the US government is hesitating, fearing higher oil prices in an election year," he said, adding: "It's disappointing."