Speaking to public radio as crunch talks on Iran's nuclear programme continued in Switzerland, Steinitz said Israel would seek to counter any threat through diplomacy and intelligence but "if we have no choice we have no choice... the military option is on the table."
Asked about possible US objections to Israeli military action, Steinitz pointed to Israel's unilateral attack against the Osirak nuclear reactor in Saddam Hussein's Iraq in 1981.
"This operation was not carried out in agreement with the United States," he said.
Steinitz, a close ally of Prime Minister Benjamin Netanyahu, said the Israeli leader had left no doubt as to the country's response to nuclear-armed Iran.
"The prime minister has said clearly that Israel will not allow Iran to become a nuclear power," Steinitz said.
Negotiations in Lausanne over Iran's nuclear program have extended beyond the deadline, with discussions continuing overnight Wednesday and beginning again on Thursday after a break of several hours. Iran's foreign minister said the sides were close to a preliminary agreement, but not yet there.
As he headed to his own meeting Thursday, Zarif said the talks had made "significant progress." But he said drafts still had to be written. Reaching both agreement in Lausanne as well as a June final deal will be "a difficult job," he said. One problem, said Zarif, was differing voices among the other side at the table -- the United States, Russia, China, Britain, France and Germany -- making it difficult for them "to reach a coordination."