Israeli Prime Minister Benjamin Netanyahu on Monday spoke with his British counterpart Theresa May about Iranian "provocation," saying that he wanted to discuss "how we can ensure that Iran's aggression does not go unanswered."

Britain and Israel both face "challenges, very clear, from militant Islam and especially from Iran," Netanyahu said as he sat alongside May at 10 Downing Street, the British prime minister's London residence, before formal talks.

"Iran seeks to annihilate Israel. It says so openly," he said.

"It seeks to conquer the Middle East. It threatens Europe; it threatens the West; it threatens the world.

"And it offers provocation after provocation," Netanyahu said.

May said she planned to discuss Syria, Iran, and the two-state solution of the Israeli-Palestinian conflict with Netanyahu.

She was expected to reiterate Britain's criticism of Israel's latest West Bank settlement plan and defend the nuclear deal made with Iran in 2015 by the United States and five other powers - Britain, China, France, Germany and Russia.

Netanyahu said he welcomed US President Donald Trump's insistence on new sanctions against Iran following its latest missile test.

"I think other nations should follow suit, certainly responsible nations," he said.

Netanyahu is scheduled to meet Trump in Washington next week.

"I think that the most important thing at the moment is that countries like the US - which will take the lead - Israel and the UK line up together against Iran's aggression and set clear limits to it," he said before leaving Tel Aviv.

On Sunday, Trump again criticized the nuclear deal, saying Iran was "the number one terrorist state."

"They are sending money all over the place - and weapons," he told Fox News, adding that the nuclear deal "should have never been negotiated."

Netanyahu is also a fierce opponent of the deal, while Trump threatened to withdraw from it during his election campaign.

But Matthew Rycroft, Britain's ambassador to the United Nations, last month said it had been "an indisputable diplomatic success."

"We've seen the possibility of Iran acquiring nuclear weapons disappear for over a decade," Rycroft said.

He said the deal had improved Iran's economic prospects, adding that British exports to Iran rose by 42 per cent in the first nine months of last year.

Opposition Labour leader Jeremy Corbyn on Monday said May's promise to tell Netanyahu that Israel was undermining trust by announcing plans to build more than 5,000 settlement units in the West Bank was "simply not good enough."

The Israeli government's decision is "illegal under international law and a threat to peace and international security," Corbyn said.

Israel's parliament is expected to pass a bill on Monday night to retroactively legalize settlements in the West Bank, though it's unlikely to make it past Israel's Supreme Court if passed.

Netanyahu reportedly has requested that the Knesset hold off on the bill until after his planned meeting with Trump on February 15.

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