Speaking just before the formal start of talks to build Israel's new ruling coalition, Prime Minister Benjamin Netanyahu said the most important mission which will face the new government was preventing a nuclear Iran.
"The most important mission facing a (new) national unity government is stopping the nuclear arming of Iran," he told ministers in his outgoing cabinet, in remarks communicated by his office.
"It is a mission which has become more complicated because Iran has equipped itself with new centrifugues which reduce the enrichment time," he said.
"We cannot live with this process."
It was the first official reaction since it emerged that Tehran was planning to install more modern equipment at the Natanz enrichment plant in central Iran, according to a UN document seen by AFP in Vienna on Thursday.
In the document, the International Atomic Energy Agency said Iran had made clear its intentions to upgrade its enrichment facilities in a letter dated January 23.
Uranium enrichment is at the heart of the global standoff over Iran's nuclear programme, which Israel and much of the West believes is a guise for developing a weapons capability.
Tehran completely denies the allegations, but multiple UN Security Council resolutions have urged Iran to suspend all enrichment activities.