World's elite gathers for Davos 2014

Israeli PM: Why we cannot do business with Rouhani

Reported by Hadley Gamble, written by Catherine Boyle
Iran doesn't 'walk the walk': Netanyahu

Benjamin Netanyahu, Prime Minister of Israel, has "zero" confidence in Iranian President Hassan Rouhani's ability to seal a nuclear deal.

"I wish I could believe him but they talk the talk but don't walk the walk," Netanyahu told CNBC at the World Economic Forum in Davos.

"He (Rouhani) has boasted in the past that he has outwitted the western powers when he was Iran's chief nuclear negotiator."

Israeli Prime Minister Benjamin Netanyahu casts his ballot at a polling station on election day, January 22, 2013 in Jerusalem, Israel.
Getty Images

Rouhani, the recently elected Iranian President, waged a charm offensive at the gathering of heads of state, chief executives and economists. This follows a thawing in Iran's relationship with the Western world, including the agreement over Iranian nuclear power agreed in Geneva last year.

(Read more: Iran wants 'constructive engagement' - but not with Israel)

"I think it is very important to prevent the real Iran which governed by the so-called supreme leader in Ali Khamenei, we have to prevent this real Iran from getting nuclear weapons," Netanyahu said.

"It's for the benefit of everyone and the benefit of peace."

Iran's tentative steps towards a rapprochement with the West come after decades of being viewed as one of the most threatening states in the Middle East - former U.S. President George W. Bush famously said it was part of an 'Axis of Evil' with Iraq and North Korea.

Its economy has also been damaged by sanctions against the regime over its nuclear capabilities.

Israel's precarious position in the Middle East, where Iran is one of several countries which do not acknowledge it, may be threatened if Iran becomes more powerful internationally.

- By CNBC's Catherine Boyle. Twitter: @cboylecnbc.