The 2,400 square kilometre valley accounts for almost 30% of the territory in the West Bank.
The claim, made during a dramatic televised address to the nation on Monday evening, led Benjamin Netanyahu's domestic rivals to call it a PR exercise from the PM to bolster his security credentials ahead of next week's Israeli election.
Speaking directly to Tehran, the prime minister intoned, "Israel knows what you're doing, Israel knows when you're doing it, and Israel knows where you're doing it".
The prime minister also reiterated his intention to annex Israeli settlements throughout the West Bank if re-elected, though in coordination with US President Donald Trump, whose long-awaited peace plan is expected to be unveiled sometime after the vote.
The West Bank is a territory that sits between Israel and Jordan, and is home to around 2.5 million Palestinians and 400,000 Jewish Israelis.
"They just wiped it out", he added, explaining that the facility was discovered based on records that Israel seized from an Iranian nuclear warehouse early a year ago in a raid during which Mossad agents spirited out of Iran a "half-ton" of nuclear documents.More news: Abhishek Has The Grace To Greet Even Vivek Oberoi
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This election is the second to be held this year after he failed to form a coalition government in May. This time, however, there's expected to be less small parties running and more unity amongst the Israeli conservatives.
Israeli Prime Minister Benjamin Netanyahu attends the weekly cabinet meeting at his office in Jerusalem, Israel, Sunday, Sept. 8, 2019. He also said this claim could goad the US president into conflict with Tehran. "If occupied in a defensive war, then it's ours".
Palestinian Prime Minister Mohammad Shtayyeh, in a statement issued shortly before Mr Netanyahu spoke, amid reports of a possible annexation announcement, said that the Israeli leader is "a prime destroyer of the peace process".
Israel has long said it intends to maintain military control there under any peace agreement with the Palestinians.
Update (9/4 12.04 p.m.): The headline of this article has been updated to more accurately reflect translations that indicate Netanyahu says he will move to annex territories by coordinating with, and having future support, from the Trump administration.