WASHINGTON (AFP) - Israeli Prime Minister Benjamin Netanyahu warned on Monday Iran must dismantle its "military nuclear program" as a condition for a diplomatic breakthrough that would head off the prospect of military action.

Netanyahu told President Barack Obama in White House talks that such a step was Israel's "bottom line" as hopes rise of a deal to end the nuclear showdown between Washington, world powers and Teheran.

Obama, meanwhile, promised Netanyahu that the United States would be "clear eyed" in talks with Iran but that it had to "test" prospects for a breakthrough, though reserved the right to take military action against nuclear installations in Iran if diplomacy failed.

Netanyahu warned that Iran was committed to Israel's destruction and that its words and actions should be judged with that in mind.

"The bottom line is that Iran fully dismantles its military nuclear program," he said after over an hour of talks with Obama in the Oval Office.

Netanyahu also argued that economic sanctions must be kept in force through any diplomatic process with Iran, which will resume next month in Geneva.

"Those pressures must be kept in place," he said.

"In fact, if Iran continues to advance its nuclear program during negotiations, the sanctions should be strengthened."

Obama credited the economic sanctions that have hammered Iran's economy with prompting its leaders to try a more serious diplomatic process on the nuclear program, following his telephone call on Friday with Iranian President Hassan Rouhani.

"We have to test diplomacy, we have to see if in fact they are serious about their willingness to abide by international norms and international law," Obama said.

"We enter into these negotiations very clear eyed. They will not be easy."

Obama also made clear that he reserved the right to take military action against Iran.

"We take no options off the table, including military options," Obama said.