Hammond further noted that Israel would have preferred a permanent stand-off with Iran instead of a nuclear deal, however that would be against the interests of the UK and the Middle East.
Addressing the Parliament, Hammond said: "The question you have to ask yourself is what kind of a deal would have been welcomed in Tel Aviv?
"The answer, of course, is that Israel doesn't want any deal with Iran. Israel wants a permanent state of stand-off and I don't believe that's in the interest of the region, I don't believe it's in our interest."
Hammond further warned that, had the global community not acted fast enough to negotiate a nuclear deal, a military conflict wasn't too far, reported The Independent.
"The real alternative to a deal that prevents Iran building a nuclear bomb almost at some stage would have been war. What we have averted with this agreement is the threat and a prospect of a war."
'Don't let them have their yellowcake and eat it too'
Meanwhile, Israeli Prime Minister Benjamin Netanyahu told CBS News that the nuclear deal is a "very dangerous deal for the world".
Netanyahu further warned the global powers that his country has a "great and mighty" strength to defend itself, reported CBS News.
"Giving the preeminent terrorist state of our time access to nuclear technology that they will ultimately turn into an arsenal of nuclear weapons and hundreds of billions of dollars to finance their terror machine is bad for everyone," said Netanyahu.
"Don't let them have their yellowcake and eat it too... We will reserve our right to defend ourselves against all of our enemies. We have strength, and it is great and mighty."