Tehran denies it is seeking atomic weapons.
Netanyahu has acknowledged that sanctions against Iran are biting but says they have not deterred Tehran from abandoning its nuclear program. He has instead urged the U.S. to draw "red lines" that would make clear which conditions would provoke an American strike on Iran's nuclear facilities a demand that Washington has rejected.
Netanyahu is expected to reiterate his position on the global stage at the U.N. on Thursday.
The report, according to details published in the Haaretz newspaper, found that Iran's oil exports declined by more than 50 percent in the past year from 2.4 million barrels a day to 1 million and oil revenues dropped by $40 billion since the beginning of the year.
An Israeli foreign ministry official confirmed the report but refused to elaborate on it. The official spoke on condition of anonymity because he was not authorized to discuss internal government documents. The Foreign Ministry based the findings on data received from countries that have embassies in Iran, according to Haaretz.
The report also claims that sanctions on Iran's central bank have made it difficult for the regime to access its foreign currency reserves, and bread, meat and electricity prices have soared because of the sanctions.
It tracks other findings on the effect of sanctions.
According to the International Energy Agency, Iran's crude oil production fell from nearly 4 million barrels a day in May to 2.9 million barrels a day in July. Imports of Iranian oil by major consumers dropped to 1 million barrels a day in July from 1.74 million barrels a day in June.
Iran relies on crude oil exports for about 80 percent of its foreign revenue.
Speaking on an Iranian TV talk show earlier this month, Iranian President Mahmoud Ahmadinejad admitted that the West's sanctions have curbed oil exports and limited banking and the banking embargo has made it difficult to supply meat and other basic needs.
"There are barriers in transferring money, there are barriers in selling oil," said Ahmadinejad. "We are going ahead, and God willing we will succeed."
In Tehran, food prices have risen sharply since the summer, with a 1.5 kilogram (52-ounce) tub of yogurt doubling in price to about 24,000 rials (87 cents) since early September.
On Wednesday, the moderate Shargh newspaper used Central Bank reports to estimate the prices of meat and rice, both staples of Iranian kitchens, have risen 48 percent and 34 percent, respectively, since last year.
Parliament speaker Ali Larijani said inflation has risen to 29 percent, newspapers reported Wednesday.
According to Haaretz, Israel's Foreign Ministry believes that Iranian citizens are blaming their leaders for the sanctions, and believe another round of sanctions could tip the balance and push Iran to negotiate a compromise on its nuclear program. The anonymous senior Israeli ministry official quoted in Haaretz did not explain how the ministry had reached those conclusions.
A poll published in Haaretz Thursday underlined jitters in Israel over the possibility it may strike Iran's nuclear program to prevent it from advancing. Fifty percent of Israelis polled said they feared the existence of their country was in danger if a war with Iran erupts, and 56 percent said they thought there was a high or medium chance that war could break out next year.
The survey, conducted by pollster Camile Fuchs, questioned 502 Israelis and had a margin of error of 4.2 percent.