"This week Iran openly violated the nuclear deal by increasing the stockpile of enriched uranium (to beyond that) allowed under the deal," Netanyahu said at an early reception in Jerusalem marking the United States' July 4 independence day.

Iran said Monday it had exceeded a limit on its enriched uranium reserves set under a 2015 nuclear deal that has edged towards collapse.

"They're hoping, that regime, that by violating the deal it will be able to blackmail the world into making concessions and reducing the economic pressure on it," Netanyahu said.

"We should do the exact opposite. Now is the time to increase the pressure. Now is the time to stand firm," he added.

Iran's move has been seen as a way of exerting pressure on Europe to try and salvage the deal which has hung by a thread since US President Donald Trump last year withdrew from the accord and reimposed biting sanctions on Tehran.

Repeating remarks he made the day before, Netanyahu urged Europe on Tuesday to increase pressure on Iran.

"Now is the time for the European powers to follow America's lead and restore sanctions against Iran, just as they promised to do in the United Nations Security Council," he said.

Netanyahu has long campaigned against the 2015 agreement.

At a separate ceremony earlier on Tuesday, Netanyahu said that a Mossad operation to obtain documents from Iran providing "proof" of Iran's nuclear weapons ambitions was aimed at convincing Trump to quit the deal.

"I approved the operation out of the thought that exposing the plan will help convince the US president to withdraw from the dangerous nuclear deal with Iran," he said of the 2018 Mossad operation in Iran.

Iran insists its nuclear programme is entirely for civilian purposes.

Israel is considered the leading military power in the Middle East and is widely believed to possess its sole, if undeclared, nuclear arsenal.