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Israel's Barak: Lack of peace worse threat than Iran

* Israeli defence chief plugs diplomacy ahead of Egypt talks

* Senior Israeli official sees possible progress ahead

JERUSALEM, Jan 26 (Reuters) - Israeli Defence Minister Ehud Barak on Tuesday called the absence of a two-state peace deal with the Palestinians a more serious threat to the future of the Jewish state than any "Iranian bomb."

Barak, head of the left-of-centre Labour party, the most moderate faction in Israel's rightist-dominated government, made his remarks in a lecture at a university, broadcast by Israeli television stations.

Barak travels to Egypt on Wednesday for talks with President Hosni Mubarak that are expected to focus on efforts to resume peace talks with the Palestinians.

"In the absence of a solution" involving an Israeli and a Palestinian state, "any other situation -- and not an Iranian bomb or any other external threat -- is the most serious threat to Israel's future," Barak said in his lecture.

Israel, believed to be the region's sole nuclear power, has pushed for stiffer Western sanctions to press Iran to stop its atomic project, which Tehran insists is intended solely to produce electricity, but Israel sees as a threat to its existence.

Israeli-Palestinian peace talks have been stalled since late 2008 when Israel launched a three-week assault on Gaza in which 1,400 Palestinians and 13 Israelis were killed.

Palestinian President Mahmoud Abbas has insisted Israel completely stop settlement building in occupied land before the talks can resume, and has rejected a temporary construction freeze ordered by Israel in November as insufficient.

But a Palestinian official said Abbas was studying a proposal from U.S. peace envoy George Mitchell for the two sides to implement confidence-building measures to get peace talks started again.

Israel has also enlisted the help of Mubarak, head of the first Arab state to make peace with the Jewish state and a longstanding mediator in the region.

A senior Israeli official travelling with Prime Minister Benjamin Netanyahu, in Poland for the 65th anniversary of the liberation of a Holocaust death camp, said earlier "there could well be progress in the near future" on the diplomatic front. (Additional reporting by Ari Rabinovitch in Warsaw)

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