An international agreement to halt Iran's nuclear programme, which went into force Monday, will not halt Tehran from pursuing its bid to build military atomic capability, Israel's prime minister said.

"The interim agreement which went into force today does not prevent Iran from realising its intention to develop nuclear weapons," Benjamin Netanyahu told a special session of parliament.

"This objective is still before us."

His remarks were made just hours after the UN's atomic watchdog confirmed that Tehran had halted production of 20 percent enriched uranium in line with an interim deal reached with world powers in Geneva in November.

In exchange for Iran's partial nuclear freeze, the European Union and the United States began suspending some of the crippling sanctions which have been imposed on the Islamic Republic.

Israel, widely seen as the Middle East's sole if undeclared nuclear power, strongly opposed the Geneva agreement, warning against any international move to ease up on sanctions.

Netanyahu compared Iran's bid for a nuclear weapon to a train which needed to pass three stops en route to building a military capacity: enriching uranium to 3.5 percent, enriching to 20 percent and a "final stop" of enriching to 90 percent.

"The Geneva Agreement cancelled the 20 percent stop but left the train on the track... so that one day, Iran will be able to rush forward to the final stop, on an express track, without slowing down for the interim stops," he said.

"In a permanent agreement, the international community must get the Iranian nuclear train of the track. Iran must never get the ability to build an atomic bomb."