"It will oblige us to work on all fronts, including harnessing the US administration to stop the threat."
The 59-year-old leader of the Likud party, which is expected to have the most seats in the 120-member parliament after next Tuesday's vote, said the divided Palestinians were too weak for a peace deal.
"Palestinian society is deeply divided ... They are not strong enough to accept minimal concessions for a peace deal and are not strong enough to fight terror," he said.
"The reality is very clear - any territory we evacuate today will be taken over by Iran," he said, alluding to Israel's withdrawal from Gaza in 2005, which he opposed.
Netanyahu vowed to form a unity government if he wins the elections.
"If elected, I intend to unite all central powers in the country in a national unity government," he said.
"I will turn to our natural allies, but that is not enough. We must unite the entire nation and I will turn to all Zionist parties because, in the face of Iran, Hezbollah and Hamas, the social and economic challenges, we will have to stand together."
Interviewed on Al Jazeera, Shmuel Sandler, a political scientist at Jerusalem's Bar Ilan University, said: "When a country the size of Iran wants to go for nuclear weapons and at the same time it calls for the destruction of the state of Israel, the conclusion is very clear: That Iran might use its nuclear capabilities against the Jewish state.
"We should not ignore such a threat. We once ignored it in Europe and we suffered very seriously."
On whether Israel might launch a pre-emptive attack, Sandler said: "This depends on how fast Iran will develop its nuclear capabilty, how close it is to it and, of course, on the guts of the new Israeli government.
"I don't think that even Netanyahu thinks that Hamas will be removed.
"The party that has most of the interest that Hamas should be removed is the Palestinian government in the West Bank.
"As we see it, I don't think that Hamas can be totally removed, it can be weakened ... but totally destroyed? I don't think it can be done."