The White House signaled frustration with Netanyahu as negotiators from key world powers and Tehran strove for a breakthrough in talks in Geneva that offer the best hope in years of ending the atomic showdown peacefully.
But Netanyahu's complaint that the proposed agreement was "very bad" won immediate support in Congress, where the Israeli leader maintains close ties and where there are nascent efforts to tie Obama's hands in any deal with Iran.
The White House said that Obama, traveling in Louisiana and Florida on Friday, called Netanyahu with an update on the talks between the P5+1 group of world nations and Iran in the Swiss city.
It gave few details of the conversation, which will raise new speculation about tensions between the two leaders, which have several times burst into the open but were eased by Obama's visit to Israel earlier this year.
"The president provided the prime minister with an update on negotiations in Geneva and underscored his strong commitment to preventing Iran from obtaining a nuclear weapon," a statement said.
"The president and prime minister agreed to continue to stay in touch on this issue," the statement said, adding that Obama reiterated his commitment to preventing Tehran getting a nuclear bomb.
P5+1 foreign ministers were pursuing an agreement to freeze Iran's nuclear program and offer some modest relief from the sanctions that have crippled the Islamic Republic's economy.
In a sign of impatience with Netanyahu, the White House earlier rejected angry Israeli criticism of the possible deal.
"There is no deal. Any critique of the deal is premature," White House spokesman Josh Earnest said aboard Air Force One.
Netanyahu had earlier warned US Secretary of State John Kerry that he was offering Iran "the deal of the century."
"This is a very bad deal. Israel utterly rejects it," Netanyahu said, vowing that Israel would not be bound by any agreement and reserved the right to do whatever is necessary to defend itself -- a clear allusion to a pre-emptive military strike.
Kerry had stopped in Tel Aviv on the way from Jordan to Switzerland for the talks in a bid to ease Israel's fury -- but his efforts appeared to fail.
"I reminded him (Kerry) that he said that no deal is better than a bad deal. And the deal that is being discussed in Geneva right now is a bad deal," Netanyahu said.
"Iran is not required to take apart even one (uranium enrichment) centrifuge. But the international community is relieving sanctions on Iran for the first time after many years."
Details of the proposed confidence building deal with Iran, which would reward a diplomatic opening offered by new President Hassan Rouhani have not been made public.
But the agreement could see Tehran freeze its nuclear efforts for as long as six months in exchange for some relief from the sanctions.
Tehran may be required to stop enriching uranium to 20 percent -- just a few steps short of weapons grade, reduce existing stockpiles and agree not to activate its plutonium reactor at Arak.
Global powers would in exchange take limited and "reversible" measures to ease sanctions, such as unfreezing some Iranian funds in foreign accounts.
US officials have privately compared the sanctions easing as a tap that could be switched back up if Iran did not live up to its end of the bargain.
But Obama's opponents in Congress rode to Israel's defense, as several efforts were under way either to tighten sanctions against Tehran or curtail the president's power to waive existing measures.
"Any agreement that does not require the full and complete halting of the Iranian nuclear program is worse than no deal at all," said Eric Cantor, Republican majority leader in the House of Representatives.
"Sanctions brought the Iranians to the table, but history tells us to be wary of their tactics."
Ed Royce, Republican chairman of the House Foreign Affairs committee added: "instead of toughening sanctions to get meaningful and lasting concessions, the Obama administration looks to be settling for interim and reversible steps.
"As called for in UN Security Council resolutions, all of Iran?s enrichment ?- the key bomb-making technology ?- should be ceased."