Prime Minister Binyamin Netanyahu warned on Thursday against an agreement with Iran that stops short of getting it to halt its uranium enrichment, amid reports that just such a deal was in the works.

"Israel understands that there are proposals on the table in Geneva today that would ease the pressure on Iran for concessions that are not concessions at all. This proposal would allow Iran to retain the capabilities to make nuclear weapons," he said  during a speech to the Jewish Agency.

"This proposal will allow Iran to preserve its ability to build a nuclear weapon. Israel is completely opposed to these proposals.  I believe that adopting them would be a mistake of historic proportions and they should be completely rejected," he said. 

Netanyahu's comments came as Iran and the P5+1, made up of the US, Russia, China, Britain, France and Germany, resumed negotiations in Geneva.

"The sanctions regime  brought the Iranian economy to the brink of the abyss, and the policies of the P5+1 can force Iran to completely dismantle  its nuclear weapons program, and that means stopping all enrichment,, and all work on the heavy water reactor and on plutonium," he said.

Netanyahu added that "anything less" would decrease the chances of reaching an agreement through peaceful means. "Israel always reserves the right to defend itself, by itself, against any threat," he asserted.

The powers hope to reach a "first step" deal to ease concern over Tehran's nuclear program - which the West fears may be aimed at developing a nuclear weapons capability - though both sides say a breakthrough is far from certain.

Iran, which says its nuclear program is a peaceful energy project, wants them to start lifting tightening sanctions that are severely damaging the OPEC producer's economy.

Both sides have limited space for compromise, with hardliners in Iran and hawks in Washington likely to denounce any concession they see as going too far.

"The talks went well," Iran's Foreign Minister Mohammad Javad Zarif Zarif told Reuters after the morning session between Iran, the United States, Britain, France, Germany, Russia and China. "I'm hopeful that we can move forward. We are making progress, but it's tough," he said.

Iran's Deputy Foreign Minister Abbas Araqchi said he hoped a deal could be struck but that the sides remained far apart.

"The differences are widespread and deep. This is undeniable. And continuing the negotiations will not be an easy task, but this does not cause us to lose hope," he said, adding he was still hopeful a "final understanding" could be reached.

A spokesman for European Union foreign policy chief Catherine Ashton, who is coordinating talks with Iran on behalf of the powers, described the morning session as "good" but declined to give details.

Michael Mann also said discussions would continue in smaller groups in the afternoon before Ashton and Zarif, who also had a breakfast meeting, were due to meet again.

"The talks are extremely complex and they are now getting into a serious phase. We very much hope there will be concrete progress here in the next couple of days," he told reporters.

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