WASHINGTON (Reuters) - Defense Secretary Leon Panetta urged Israel on Friday to get back to the "damn" negotiating table with Palestinians and take steps to address what he described as the Jewish state's growing isolation in the Middle East.
Panetta, addressing a forum in Washington, also made one of his most extensive arguments to date against any imminent military action against Iran over its nuclear program, saying he was convinced that sanctions and diplomatic pressure were working.
"You always have the last resort ... of military action. But it must be the last resort, not the first," Panetta said.
Militarily strong, Israel is battling a diplomatic storm as Arab uprisings upset once-stable relationships in the Middle East. But Panetta warned Israel against viewing uprisings like the one in Egypt that toppled president Hosni Mubarak as an excuse to enter a defensive crouch.
"I understand the view that this is not the time to pursue peace, and that the Arab awakening further imperils the dream of a safe and secure, Jewish and democratic Israel. But I disagree with that view," Panetta said.
He said Israel needed to take risks, including by breathing new life into moribund peace talks with Palestinians. When asked by a moderator what steps Israel needed to take to pursue peace, Panetta said: "Just get to the damn table."
"The problem right now is we can't get 'em to the damn table, to at least sit down and begin to discuss their differences," Panetta said.
Panetta said the United States would safeguard Israel's security, ensure regional stability and prevent Iran from obtaining a nuclear weapon -- a goal Tehran denies having.
"Israel, too, has a responsibility to pursue these shared goals -- to build regional support for Israeli and United States' security objectives," Panetta said.
"I believe security is dependent on a strong military but it is also dependent on strong diplomacy. And unfortunately, over the past year, we've seen Israel's isolation from its traditional security partners in the region grow."
Panetta suggested that Israel reach out and mend fences with countries like Turkey, Egypt and Jordan which "share an interest in regional stability."
Turkey was the first Muslim state to recognize Israel, in 1949, but relations worsened last year when Israeli commandos boarded an aid flotilla challenging a naval blockade of the Palestinian enclave of Gaza and killing nine Turks in ensuing clashes.
"It is in Israel's interest, Turkey's interest, and U.S. interest for Israel to reconcile with Turkey, and both Turkey and Israel need to do more to put their relationship back on track," Panetta said.
Israel is closely watching developments in Egypt, whose new rulers may be more susceptible to widespread anti-Israeli sentiment than under Mubarak.
Egyptians voted on Friday in the opening round of the country's first free election in six decades. The Muslim Brotherhood's party and its ultra-conservative Salafi rivals looked set to top the polls.
But Panetta said the best course for the United States and the international community was to continue to put pressure on Egypt to follow through with transition to democracy and ensure any future government stands by its peace treaty with Israel.
Turning to Iran, Panetta used some of his strongest language yet to explain U.S. concerns about any military strike against Iran over its nuclear program -- which the West believes is aimed at an atomic bomb. Tehran denies this, saying its uranium enrichment is entirely peaceful.
Panetta said a strike could disrupt the already fragile economies of Europe and the United States, trigger Iranian retaliation against U.S. forces, and ultimately spark a popular backlash in Iran that would bolster its rulers.
It also may not be effective. Panetta cited estimates from Israelis that a strike might set back Iran's nuclear program by one to two years "at best."
He finally warned about engulfing the region in war.
"Lastly I think the consequence could be that we would have an escalation that would take place that would not only involve many lives, but I think could consume the Middle East in confrontation and conflict that we would regret," he said.
Editing by Christopher Wilson