Israeli Prime Minister Benjamin Netanyahu said on Sunday there was still time to stop an Iranian agreement with world powers that he says would give Tehran nuclear arms.

"It's still not too late to retract the plan that gives Iran an agreement which will pave it a road to a nuclear weapon," he said at a ceremony marking Israel's capture of Arab east Jerusalem in the 1967 Six Day War.

The United States as well as Britain, China, France, Russia and Germany are in the midst of negotiations with Tehran to finalise a deal by June 30 that would prevent Iran from developing nuclear weapons, in exchange for an easing of crippling economic sanctions.

Israel says that Iran cannot be trusted to honour the nascent deal, which is anyway full of loopholes.

"We oppose this deal and we are not the only ones," Netanyahu said. "It is necessary and possible to achieve a better deal."

Arab and largely Sunni Muslim states of the Gulf fear a nuclear deal could be a harbinger of closer US ties with their Shiite arch-foe Iran, a country they also see as fuelling conflicts in Yemen, Syria and Iraq.

US President Barack Obama tried to reassure America's Gulf allies at a Camp David summit Thursday that engaging with Iran would not come at their expense.

Iran has long asserted its nuclear programme is for peaceful energy purposes, and that international concern about it seeking a nuclear bomb is misplaced.