Netanyahu, who faces a general election in the fall, is expected to escalate strikes on Iran's proxy terror group Hezbollah in Lebanon to shore up support at home, a fresh intelligence report warns.

An official familiar with the report told the Washington Post that Israel's leadership is frustrated with Trump's 14-point plan and what it sees as a capitulation to Tehran.

The document states that Jerusalem fears the agreement will hobble its ability to defend itself against Hezbollah, a former official said.

The deal has frustrated many in Israeli government who want to continue its offensive against Iran's proxies to their north - some have openly criticized Trump and his deal. 

Further, sources reveal that Israel's occupation of southern Lebanon and attacks on Hezbollah militants there and near the capital Beirut are important to voters - a key consideration of Netanyahu's as he faces mounting political opposition. 

The report stated that a suspension of hostilities or a withdrawal from Lebanon would be considered the prime minister's defeat, a current US intel official said. 

'For every tear of an Israeli mother, a thousand Lebanese mothers must weep,' Itamar Ben-Gvir, Israel's minister of national security, shockingly posted on Friday. 'All of Lebanon must burn!' 

Trump signed the deal with Iran on Wednesday at the G7 summit in France, caving on red lines he once drew over uranium enrichment, ballistic missiles and billions in frozen funds.

The deal hands Tehran a $300billion reconstruction fund, the lifting of all US sanctions and the release of frozen assets, in exchange for a pledge to never build a nuclear weapon.

US and Iranian negotiators had been due to meet in Switzerland on Friday to thrash out a wider deal, but the talks were abruptly called off as fighting in Lebanon flared.