Prime Minister Naftali Bennett said Iran's "regime of brutal hangmen" wants nuclear weapons - something Iran has repeatedly denied.
Ebrahim Raisi was declared the winner of Iran's presidential election on Saturday.
He is is Iran's top judge and holds ultra-conservative views.
In a statement following his victory, he promised to strengthen public trust in the government, and be a leader for the entire nation.
"I will form a hard-working, revolutionary and anti-corruption government," state media quoted him as saying.
The election race was widely seen as being designed to favour Mr Raisi. The president-elect - who will be inaugurated in August - is under US sanctions and has been linked to past executions of political prisoners.
In an Israeli cabinet meeting on Sunday, Mr Bennett told colleagues this was "the last chance for world powers to wake up... and understand who they are doing business with".
"A regime of brutal hangmen must never be allowed to have weapons of mass destruction."
Iran and Israel have been in a long-running "shadow war", which has resulted in both countries taking part in tit-for-tat actions, but so far avoiding all-out conflict. Recently, however, the hostilities between the two have escalated again.
The situation is complex, but one big source of tension is Iran's nuclear activities.
Iran blames Israel for the murder of its top nuclear scientist last year and an attack on one of its uranium enrichment plants in April.
Israel does not believe that Iran's nuclear programme is purely peaceful, and is convinced it is working towards building a nuclear weapon.
The 2015 Iran nuclear deal, which saw harsh penalties on Iran lifted as long as it stopped some nuclear work, collapsed when former US President Donald Trump abandoned the deal in 2018, and re-imposed the crippling economic sanctions. The Biden administration is now trying to work out a way to re-enter the deal.
In response to the sanctions being tightened, Iran stepped up its nuclear activities, and is currently enriching uranium at its highest levels ever - although still short of what is needed to make nuclear-grade weapons.
Commenting on the election result, the US said it regretted Iranians were "denied their right to choose their own leaders in a free and fair electoral process".
Voter turnout was at a record low for this election, with less than 50% of registered voters going to the polls, compared to more than 70% in 2017. Many people shunned the vote, believing that it had been engineered in favour of Mr Raisi, who is a staunch ally of Supreme Leader Ayatollah Ali Khamenei.
Ayatollah Khamenei has repeatedly called for the elimination of the state of Israel. In 2018, he described the country as a "cancerous tumour" that had to be removed from the region.
Nuclear deal talks
Mr Raisi's win has come on the same weekend as negotiations to try and revive the 2015 Iran nuclear deal continue in Vienna.
The EU has said another formal meeting will take place on Sunday between Iran and the six world powers involved in the deal. This is the sixth round of indirect talks between the US and Iran, and this week officials said the parties remain divided on some key issues, Reuters reported.
A spokesman for the US State Department said the indirect talks would still continue after Mr Raisi takes power.
What about the reaction from elsewhere?
Russia's Vladimir Putin was quick to congratulate Ebrahim Raisi, highlighting the "traditionally friendly and good-neighbourly" relationship between the two countries.
The leaders of Lebanon, Syria, Iraq, Turkey and the United Arab Emirates sent similar messages of support and congratulations.
A spokesperson for Hamas, the Palestinian militant group that runs Gaza, wished Iran "progress and prosperity".
However, human rights groups have said Mr Raisi should be investigated for atrocities.
"As head of Iran's repressive judiciary, Raisi oversaw some of the most heinous crimes in Iran's recent history, which deserve investigation and accountability rather than election to high office," Michael Page from Human Rights Watch said.
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