"I take this opportunity to send condolences to the families of the 66 civilians that lost their lives in the plane accident today," Mr Netanyahu said at the Munich Security Conference.
"We have no quarrel with the people of Iran, only with the regime that torments them," he added.
Earlier in his fiery speech, the premier warned Tehran not to "test Israel's resolve" as tensions between the arch enemies have reached fresh heights over Iran's activities in Syria.
Officials said an Iranian passenger plane on a domestic flight crashed into the country's Zagros mountains Sunday, killing all 66 people on board.
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.