U.S. Defense Secretary Leon Panetta on Friday urged Israel to "reach out and mend fences" with Turkey, Egypt and other security partners in the Middle East, and to restart peace negotiations with the Palestinians, saying he is troubled by the Jewish state's growing isolation in the increasingly volatile region.

In a speech at the Washington-based Saban Center for Middle East Policy, Panetta said that while Israel is not solely responsible for its isolation, it could more actively attempt to reverse the trend.

"Security is dependent on a strong military, but it is also dependent on strong diplomacy," Panetta said. "And, unfortunately, over the past year we have seen Israel’s isolation from its traditional security partners in the region grow, and the pursuit of a comprehensive Middle East peace has effectively been put on hold."

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"This isolation is due to a number of factors," Panetta said. He said there is an international campaign underway to isolate Israel, and that U.S. President Barack Obama has "stood steadfastly in the way of that effort, especially in the United Nations." Panetta said he had been working with Defense Minister Ehud Barak and others "to find ways to help Israel take steps which are profoundly in its interests."

Panetta urged Israeli leaders to "reach out and mend fences with those who share an interest in regional stability" – countries such as Turkey, Egypt and Jordan. "This is not impossible," he said. "If the gestures are rebuked, the world will see those rebukes for what they are. And that is exactly why Israel should pursue them."

Panetta, who made his first visit to Israel as Pentagon chief in October, said it was in the interests of Israel as well as Turkey, a NATO ally of the U.S., to reconcile. He said he would take that message to Ankara when he visits there in two weeks.

He urged Israelis to address their concerns about Egypt's political revolution through increased communication and cooperation with Egyptian authorities, and "not by stepping away from them."

Panetta also addressed the stalled peace talks between Israel and the Palestinians, and pressed Israeli leaders to do more to restart negotiations, imploring them to "just get to the damn table." Direct peace negotiations between Israel and the Palestinian Authority broke down in late September 2010 when Israel's 10-month moratorium on settlement construction in the West Bank expired.

Panetta urged Israel to "lean forward" to achieve peace with the Palestinians. "Rather than undermining the Palestinian Authority, it is in Israel's interests to strengthen it by ... continuing to transfer Palestinian tax revenues and pursuing other avenues of cooperation," he said.

A spokesman for Prime Minister Benjamin Netanyahu on Saturday responded to Panetta's assertion that Israel is not doing enough to return to negotiations by blaming the Palestinian leadership for the deadlock in peace talks.

The Palestinians are "playing diplomatic games to try to cover their position, which is to boycott Israel and to refuse to enter negotiations," spokesman Mark Regev said. He added that Israel remains prepared to resume peace talks without preconditions.

Palestinian Authority Spokesman Ghassan Khatib said the Palestinians are eager to resume talks, but will not do so until Israel freezes settlement building in the West Bank, one of the areas the Palestinians seek for a future state.

In his speech at the Saban Center, Panetta – who has previously warned against a military strike on Iranian nuclear facilities – underscored Obama's determination to stop Iran from acquiring nuclear weapons. He called Iran "a very grave threat to all of us" and said any Iranian disruption of the free flow of commerce through the Persian Gulf constitutes a "red line" for the U.S.

Panetta said a nuclear-armed Iran poses the greatest threat to security and prosperity in the Middle East, but cautioned against using military action to thwart Tehran's nuclear ambitions.

Panetta spoke starkly of the challenge of Iran's nuclear ambitions, saying that Obama has not ruled out using military force to stop Iran from going nuclear. However, in a question-and-answer session with his audience after his speech, Panetta laid out his thinking on the arguments against an Israeli or U.S. military attack on Iran's nuclear facilities.

He said such an attack would "at best" delay Iran's nuclear program by one or two years. "We have to be careful about the unintended consequences" of an Israeli or U.S. attack, he said. Among those unintended consequences would be an increase in regional support for Iran and the likelihood of Iranian retaliation against U.S. forces and bases in the Middle East. An attack also would have harmful economic consequences and could lead to military escalation, he said.

Panetta said that the Obama administration is focused on diplomacy to counter the Iranian threat, and the U.S. is trying to organize unprecedented sanctions against Tehran and strengthen security partnerships with key partners in the Persian Gulf and the Middle East.

"Iran must ultimately realize that its quest for nuclear weapons will make it less, not more, secure," Panetta said. "These efforts are increasing Tehran’s isolation and I continue to believe that pressure – economic pressure, diplomatic pressure -- and strengthened collective defenses are the right approach. Still, it is my department’s responsibility to plan for all contingencies and to provide the president with a wide range of military options should they become necessary."

Panetta reassured Israelis that they can rely on continuing support from the U.S.

"I want to be clear that Israel can count on three enduring pillars in U.S. policy in the region, all of which contribute directly to the safety and prosperity of the Israeli people," Panetta said. "First, our unshakable commitment to Israel’s security. Second, our broader commitment to regional stability. And third, our determination to prevent Iran from acquiring nuclear weapons."

However, he said, "in every strong relationship built on trust, built on friendship, built on mutual security, it demands that both sides work towards the same common goals." He said that Israel has the responsibility to pursue goals it shares with the U.S. and to build regional support for the allies' security objectives.

Israeli Defense Minister Ehud Barak on Saturday said that all the options for confronting Iran remain on the table. "It would be excellent if we could stop their nuclear program through diplomacy," Barak said on Channel 2's "Meet the Press." "But all options are on the table." He added that Israel "cannot free itself from the obligation to make sovereign decisions."

Barak said that for the first time in years, the U.S., Israel, European countries and the International Atomic Energy Agency have identical intelligence about Iran's nuclear program. He also said that, despite the mysterious explosions that have taken place in Iran in recent weeks, "the more time passes, the closer Iran gets to having nuclear weapons." Sanctions against Iran must be "strong, [imposed] quickly, and purposeful," he said.

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