Prime Minister Benjamin Netanyahu's decision to scrap plans for a "record" 20,000 West Bank settler homes was driven by Israel's bid to scupper an Iranian nuclear deal, observers said Wednesday.

Netanyahu publicly forced Housing Minister Uri Ariel, who had approved the plans, to back down after drawing U.S. condemnation for a settlement project the Palestinians warned would end a fragile peace process.

The White House warned U.S. lawmakers Tuesday that tightening sanctions on Iran could box America into a "march to war" and derail a diplomatic push to limit Tehran's atomic program.

The warning marked a significant toughening of President Barack Obama's stance towards skeptical U.S. lawmakers as he prepares to resume high-stakes nuclear diplomacy with Iran later this month.

Israel's Foreign Minister Avigdor Lieberman, newly reappointed after being cleared of corruption, on Tuesday urged his government to avoid spats with the U.S. over its policy on Iran's nuclear drive.

Israel and the United States have been locked in a war of words over negotiations between world powers and Iran that could see sanctions relaxed in exchange for Tehran curbing or freezing parts of the disputed atomic program.

Israeli security sources claimed Tuesday that Iran's controversial nuclear program has cost the country $170 billion, mostly due to tough economic sanctions.

The figures came as Israel and the U.S. were locked in a war of words over negotiations between world powers and Iran that could see sanctions relaxed in exchange for Tehran curbing or freezing parts of its controversial nuclear program.

A Yemeni court on Tuesday sentenced crew members of a vessel intercepted with an arms shipment allegedly from Iran to between three and 10 years in prison.

The court in the main southern city of Aden jailed three defendants for six years and four others for one year, an Agence France Presse correspondent in the special court reported.

A framework accord signed Monday in Tehran by the U.N. atomic agency and Iran is only a very preliminary step towards addressing concerns about Tehran's nuclear program, analysts said.

In particular it does very little to ease fears about the nuclear reactor Iran is building in Arak and no specific mention is made of the watchdog's long-stalled probe into alleged past efforts to develop an atomic bomb.

Talks on Iran's nuclear program aim at finding an interim agreement involving limited sanctions relief before any final settlement, British Foreign Secretary William Hague said on Monday.

Tehran and world powers failed to clinch a long-sought deal Sunday despite marathon talks in Geneva but kept hopes alive by agreeing to meet again in the Swiss city on November 20.

After years of stalemate, recent progress in nuclear talks with world powers owes much to a dramatic shift in Tehran from a policy of confrontation to one of constructive dialogue.

The progress in Geneva that saw negotiators draw closer to a long-elusive agreement than they have been in more than a decade came only five months after President Hassan Rouhani, a reputed moderate, took office after vowing a new approach.

U.S. Ambassador Dan Shapiro on Monday sought to quell Israeli fears over an emerging deal with Iran, vowing that Washington would never let Tehran acquire a nuclear weapon.

"On this crucial issue the U.S. and Israel share an identical agenda," Shapiro told delegates attending the General Assembly of the Jewish Federations of North America in Jerusalem.

Iran on Monday agreed with the U.N. nuclear watchdog on a "roadmap for cooperation" to inspect its disputed program, as the United States questioned Tehran's self-declared right to uranium enrichment.

Diplomats insist world powers are close to reaching a landmark interim deal to curb Iran's nuclear program in return for sanctions relief despite failing to do so in Geneva over the weekend.