Finance Minister Yuval Steinitz called Dagan's statements unnecessary, The Jerusalem Post said.
"An aerial strike on Iran is foolish and is not beneficial," Dagan said Friday at the Hebrew University in Jerusalem, Yedioth Ahronoth reported Sunday.
"Those who strike in Iran must realize that they may prompt a regional war where missiles will be fired by Iran and by Hezbollah. The Iranian problem must be shaped as an international problem, and efforts to delay Iran's nuclear program should continue," the Hebrew daily quoted Dagan saying.
Two former Mossad chiefs defended Dagan, saying he has every right to express his opinion.
Danny Yatom told Israel Radio Dagan was entitled to have his say as he is no longer head of Israel's intelligence agency. Former Mossad chief Ephraim Halevy supported Dagan's right to free speech but conceded he could have phrased it differently.