"We have determined the existence of a plan that was put together at the highest political level in the 1990s," Nisman said.
Menem said the allegation was "a libellous and nasty fable" and blamed it on Cristina Fernandez, the president, and her husband, Nestor Kirchner, a former president, who Menem said used the case "systematically and vilely" for political ends.
A truck bomb destroyed the seven-storey Argentine Israeli Mutual Association building, a centre for Latin America's largest Jewish community, in the 1994 attack.
Al Jazeera's Lucia Newman in Buenos Aires said there had long been speculation that people in high places had been involved in the attack or were responsible for covering it up.
Argentina's Clarin newspaper reported in 2005 that the man's grandfather had migrated with Menem's father from the same town in Syria.
The extent of the families' later contact was not immediately clear.
Argentina has accused Iranian officials of plotting the attack and Interpol issued international wanted notices at Argentina's request for five Iranians, including Akbar Hashemi Rafsanjani, Iran's former president.
Prosecutors working under Menem's administration arrested at least 16 suspects in the case.
However, it collapsed in 2004 when a federal court accused a judge handling the matter of authorising a bribe to pay a witness, allegedly to divert the probe away from those who had planned the attack.
Menem is scheduled to go on trial in July in another case involving illegal arms sales to Ecuador and Croatia during his time in office.