"We will not allow Iran to restore its ballistic missile industry, and certainly we will not allow it renew the nuclear programme that we significantly damaged," Netanyahu told lawmakers.

"If we are attacked, the consequences for Iran will be very severe," he said.

Netanyahu's threat comes days after Trump threatened to "eradicate" Iran's nuclear and ballistic missile programme, after the two leaders met in Washington last week.

Israeli officials and media have expressed concern in recent months that Iran is rebuilding its ballistic missile arsenal after it was adamaged during the 12-day war with Israel in June.

Trump said Iran "may be behaving badly" and was looking at new nuclear sites to replace those targeted by US strikes during the same conflict, as well as restoring its missile stockpiles.

"I hope they're not trying to build up again because if they are, we're going have no choice but very quickly to eradicate that buildup," Trump said, adding that the US response "may be more powerful than the last time."

But Trump said he believed Iran was still interested in a deal with Washington on its nuclear and missile programmes. Tehran denies that it is seeking nuclear weapons.

Netanyahu, meanwhile, said the protests in Iran had "expanded greatly".

"It is very possible that we are at a decisive moment -- a moment when the Iranian people will take their destiny into their own hands," he said in parliament.

Protests erupted in Iran on December 28 when shopkeepers in the capital Tehran staged a strike over high prices and economic stagnation.

They have since spread to other cities and expanded to include political demands.

On Sunday, Netanyahu said that Israel stood in solidarity with the Iranian people during the ongoing demonstrations.

"We stand in solidarity with the struggle of the Iranian people and with their aspirations for freedom, liberty and justice," Netanyahu said at the weekly cabinet meeting.