Sanctions against Iran have as yet been ineffective, Israeli Prime Minister Benjamin Netanyahu told an annual gathering of foreign journalists in Jerusalem on Tuesday, dpa reported.
"The only way sanctions can be effective is that if they don't work, then they will be followed by a credible military option," he said.
Last year had been the "year of WikiLeaks," he added. This had "exposed the three main concerns of most governments in the region, and these three concerns are one Iran, two Iran and three Iran," he continued.
Israel and other western countries suspect Iran of attempting to develop nuclear weapons. Iran insists its programme is purely for civilian reactors.
Netanyahu also accused the Palestinian leadership in Ramallah of blocking further peace talks.
"What is preventing the advent of peace negotiations is that the Palestinians are doing everything in their power not to negotiate," he claimed.
His right-wing, settler-friendly government coalition partner was not what was preventing progress, the premier said. "No coalition considerations will prevent me from pursuing a peace I believe in," Netanyahu said.
"If the Palestinians are prepared to engage in substantive negotations, they will find that this government, my government, is able to achieve an historic peace," he continued.
Direct talks between the two sides broke off in September just three weeks after they began when a partial freeze on Israeli settlement-building expired.
The Palestinians have said they will not return to the negotiating table until Israel renews the freeze on settlement-building in the West Bank and East Jerusalem, which they hope to see as the capital of their future state.