Israel is expanding ties throughout the Middle East but not with Iran, Prime Minister Benjamin Netanyahu said on Wednesday, accusing his country's arch-foe of trying to dominate the region.

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Addressing a Jerusalem diplomatic conference, Netanyahu said Israel has relations "with nearly every single one" of nations that do not formally recognise it, due to their growing need for its economic and security expertise.

"See that country in red? By the way that's not on our list of diplomatic allies," he said, pointing to Iran on a regional map. He deemed Iran an "aggressive regime" seeking nuclear arms and a "land bridge" via its allies to the Mediterranean sea.