The State Department rejected on Wednesday Israel's assessment that the deal offered to Iran by the world powers in Geneva could be worth up to $40 billion to Tehran.

Iran and the P5+1 - the United States, France, Germany, Russia, Britain and China - edged close to a preliminary accord on Iran's nuclear program during negotiations last week. The world powers are considering a temporary and limited relief of international sanctions in exchange for steps taken by Iran to halt most of its nuclear program.

Strategic Affairs Minister Yuval Steinitz said on Wednesday that the sanctions relief package offered to Iran could be worth as much as $40 billion to Tehran.

But when asked about Steinitz's estimate, State Department spokeswoman Jennifer Psaki criticized Israel and said that Steinitz's "number, I can assure you, is inaccurate, exaggerated, and not based on reality." Psaki did not offer an American assessment, but did say it was considerably lower than that of Israel.

Steinitz said Israel believed the sanctions put in place by the United States and European Union last year cost Iran's economy around $100 billion per year, or nearly a quarter of its output.

"The sanctions relief directly will reduce between 15 to 20 billion dollars out of this amount," Steinitz said on Wednesday, suggesting that the weakening of the sanctions regime could eventually result in a $40 billion boost to the Iranian economy.

"This is very significant. It's not all the sanctions. It's not the core sanctions about oil exports and the banking system, but it's very significant relief for the Iranians," he said at an English-language event hosted by the Jerusalem Press Club.

Signs of a rift between Israel and the U.S. emerged last week over the negotiations with Iran.

On Friday, coming into a meeting with U.S. Secretary of State John Kerry ahead of his departure from Israel to Geneva, Prime Minister Benjamin Netanyahu said that Israel does not see itself bound by any deal made with Iran.

Kerry said Monday that Netanyahu "needs to recognize that no agreement" with Iran has been reached and his opposition is premature.

The six world powers and Iran agreed to resume negotiations on November 20.

Open gallery view U.S. Secretary of State John Kerry walks with Prime Minister Benjamin Netanyahu at Villa Taverna in Rome, Italy, October 23, 2013. Credit: Reuters