Prime Minister Binyamin Netanyahu
Prime Minister Binyamin NetanyahuIsrael news photo: Flash 90

Prime Minister Binyamin Netanyahu had cautious praise for the European Union on Monday, saying he believes the entity’s decision to embargo Iranian oil is a “step in the right direction.”

Speaking at a Likud faction meeting, the prime minister said he approved of imposing additional sanctions against Iran in order to discourage the country from continuing its nuclear development activities.

However, he said, “the effectiveness of the sanctions will only be tested -- and become clear -- in their results.” The European Union voted Monday to immediately suspend all new oil contracts with Iran, and to end all existing contracts by June 2012.

“This tightening of the sanctions and the tone adopted by the Europeans is important because it makes clear to the Iranians that it is unacceptable they continue their nuclear program,” Intelligence Minister Dan Meridor commented earlier in the day in an interview with IDF Army Radio.

“Iran must understand there is a determination to prevent it from acquiring nuclear weapons. The [Tehran] regime is concerned about the impact of these sanctions, which do have a chance of succeeding,” he added, but noted it would have been best had they been in place “faster.”

Meridor, who also controls Israel’s atomic affairs portfolio, noted that sanctions would be even more effective if Japan, South Korea and all other countries who also purchase oil from Iran would also participate, “in order to raise the price” for the Islamic Republic.

U.S. President Barack Obama signed the Defense Authorization Act Saturday, that allegedly also imposes 'tough new sanctions' on Iran -- but the bill appears to be filled with loopholes, including a waiver that gives the president the option of allowing other countries to play for time before punishing the Islamic Republic with the new tightened regulations.

The UK and Canada announced several months ago they would join the effort to impose sanctions, and were among the first to actually back up their claims with concrete action.