Speaking before the Israeli parliament, Benjamin Netanyahu said he expects any new government in Egypt to honor its three-decade-long peace agreement with Israel.
But he warned that Islamic groups have already taken over by democratic means in Iran, Lebanon and Gaza.
"Is there freedom in Iran? Is there democracy in Gaza? Does Hezbollah promote human rights?" he asked. "They (Iranians) want an Egypt that goes back to the Middle Ages. They want Egypt to turn into another Gaza, that will be run by radical forces that are against everything we want, everything the democratic world stands for."
He did not say how Iran would do this.
After initially keeping a low profile over the unrest, Netanyahu has in recent days been warning of the dangers posed by instability in Egypt.
Egypt became the first Arab nation to sign a peace accord with Israel in 1979 and has strictly honored it. Egyptian President Hosni Mubarak has close ties to Israeli leaders and has acted as a bridge between Israel and the Palestinians to the broader Arab world.
The anti-government protests, led by secular Egyptian activists, forced Mubarak to announce he will not seek re-election.
Netanyahu said that a more democratic Egypt would not pose a threat to Israel. He called on the international community to insist that whoever takes over power in Egypt remains committed to peace with Israel.