Israeli Prime Minister Benjamin Netanyahu yesterday denounced the big powers’ nuclear deal with Iran as a historic mistake that left the production of atomic weapons within Tehran’s reach, and he said Israel would not be bound by it.

Having lost its battle against easing sanctions on Iran, Israel appeared to be charting a new strategy: intense scrutiny by its intelligence services of Iran’s compliance with the interim agreement and lobbying for stronger terms in a final accord world powers and the Islamic Republic will pursue.

The success of international diplomacy in re-engaging with Iran, after a protracted, volatile standoff, and concluding an accord in marathon talks in Geneva marked a stinging setback for Netanyahu. His military options in confronting Iran now seem more limited and likely to risk Israel’s isolation.

A grim-faced Netanyahu – deep in a rift with Israel’s main ally, the United States, over a deal that did not meet his demands to strip Iran of its nuclear enrichment capabilities – said his government would not be bound by the accord.

“What was concluded in Gen-eva last night is not a historic agreement, it is a historic mistake,” Netanyahu said in a statement he delivered in English after meeting his Cabinet.

“Today the world has become a much more dangerous place because the most dangerous regime in the world took a significant step towards obtaining the world’s most dangerous weapon.”

The US said the agreement would arrest Iran’s most sensitive nuclear work, including the construction of the Arak research reactor, which is of special concern for the West as it could produce plutonium for bombs.

The deal would neutralise Iran’s stockpile of uranium refined to a fissile concentration of 20 per cent – a close step away from the level needed for weapons – and provided for intrusive UN nuclear inspections, a senior US official said.

Iran, which says it is pursuing its nuclear programme for peaceful purposes only, also promised to stop uranium enrichment above a low fissile purity of five per cent, a US fact sheet said.

Netanyahu said those terms left Iran with little incentive down the line to dismantle its uranium-enriching centrifuges and plutonium reactor.

“Sanctions that took years to put in place are going to be eased. Iran is going to receive billions of dollars’ worth of sanctions relief,” he said. “So the pressures on Iran are being lifted, they are being eased, and with the lifting of this pressure, this first step could very well be the last step.”

Netanyahu repeated his long-standing threat of possible military action against Iran – even as a member of his security Cabinet acknowledged the interim accord restricted that option.

“The regime in Iran is committed to destroying Israel. And Israel has the right and the obligation to defend itself by itself from any threat,” Netanyahu said.

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