"I think it could turn out to be a cataclysmic error of gigantic proportions," Dershowitz said of the deal, which he described as "naive."
"It could also turn out to be successful, to be the beginning of a negotiated resolution," Dershowitz told Newsmax on Sunday. "But I think the likelihood of it being the former is considerably greater."
Dershowitz said he thought the administration of President Barack Obama did a poor job of negotiating the deal.
"I think it's thoughtful and intelligent Americans vs. naive Americans," he said.
The deal, announced late Saturday night in the United States, makes it more likely Iran will develop a nuclear bomb, likely creating the need for a future military strike by Israel or the United States, Dershowitz said.
It also increases the possibility of a nuclear arms race in the Middle East with Saudi Arabia obtaining nuclear weapons as well, he said.
The Harvard Law School professor thinks there is at best a 10 percent chance that the administration can change attitudes among Iran's Islamist leadership.
"But when you weigh that against the 30 or 40 percent chance that they're dead wrong – nuclear bomb wrong – then it's a very bad assessment of risk and benefits," he told Newsmax.
"This is first-year negotiating theory, and this administration gets a D-minus with grade inflation," Dershowitz said. "You don't let up on sanctions that are working."
Other countries, such as China, are taking the deal as a green light to do business with Iran, he said. All the nuclear experts, Iran experts and congressional experts he has spoken with oppose the deal, he said.
Israel has spoken out against the deal, and Saudi Arabia is known to be wary of Iran. But it is a mistake to think of it as a dispute between Israel and Saudi Arabia on one hand and the United States on the other, Dershowitz said. "This is a highly disputed and contested issue within the United States."
Dershowitz counts himself among the skeptics.
"I think it's a bad deal for America and a bad deal for the West," he said. "The risks to world peace are far greater than the potential benefits to world peace."
American negotiators used the wrong model, Dershowitz said. They used the model of Syria where the administration "accidentally backed into a good result instead of the North Korea model, which is much more parallel.
"North Korea does not pose a direct threat to the United States. Iran does," Dershowitz said. "You think that we'd learn from our mistakes in North Korea."
Dershowitz said that if Iran fails to comply, he hopes Congress ratchets up the sanctions once the six months are complete. But he isn't sure that will be possible since China and other nations will be doing business with them by then.
"I think we have hurt our sanction regime irretrievably by this measure," he said.
Congress should take preemptive action by passing authorization in advance to allow the president to increase sanctions and deploy the military option in the event Iran crosses a red line, Dershowitz said. That way, the president doesn't have to go to Congress after red lines are crossed.
"I think that would send a powerful message to Iran that the military option is still on the table," he said.
Former U.N. Ambassador John Bolton suggested the White House struck the deal out of fear that Israel would attack Iran's nuclear facilities as it did those of Iraq in 1981 and Syria in 2007.
Dershowitz said that since Israel was not consulted on the agreement, it isn't bound by it and is within its rights to defend itself.
Israel "has the absolute right to prevent a country that has threatened its destruction from developing nuclear weapons," he said. "That's a right in law, it's a right in morality, and it's a right in diplomacy."