Israeli-Palestinian talks broke down more than a year ago over the issue of settlement building [EPA]

Leon Panetta, US defence secretary, has urged Israel to go back to the negotiating table with Palestinians and to address what he described as the country's growing isolation in the Middle East.

In remarks made at the Brookings Institution in Washington on Friday, Panetta said: "The problem right now is we can’t get them [Israel's leaders] to the damn table to at least sit down and begin to discuss their differences.

"We understand the concerns of Israel, we understand the concerns of the Palestinians.

"If they sit at a table and work through those concerns and the United States can be of assistance in that process, then I think you have the beginning of what could be a process that could lead to a peace agreement.

"But if they aren’t there, if they aren’t at the table, this will never happen. So first and foremost get to the damn table."

Talks broke down in September 2010 over Israel's refusal to halt construction in illegal settlements in the occupied West Bank.

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 co-operation,'' he said.

No Israeli reaction

Al Jazeera's Tony Birtley in Jerusalem said there was no immediate reaction from the office of Binyamin Netanyahu, the Israeli prime minister.

"[There's] no official reaction today because this is the day of rest, but I am sure tomorrow there will be some strong words from the government," he said.

"They'll disagree quite strongly. They will argue, I think, that they are not isolating themselves [and that] this is being done for them and every measure they're taking is directed towards getting the peace process back on track."

"To be fair to Israel, they're now saying they should go back to the negotiating table," our correspondent said.

"There's a problem now. I think both sides have got themselves into a corner - the Palestinian side has said they won't go back to the negotiating table unless the settlement building in East Jerusalem and the West Bank is stopped ... something that Israel will not agree to."

Panetta said he was troubled by Israel's growing isolation in the region. While Israel is not solely responsible for this, he said it could more actively attempt to reverse the trend.

"For example, Israel can reach out and mend fences with those who share an interest in regional stability, countries like Turkey and Egypt, as well as Jordan,'' he said.

"This is not impossible. If the gestures are rebuked, the world will see those rebukes for what they are. And that is exactly why Israel should pursue them."

Turkey ties strained

Turkey downgraded diplomatic relations with its former ally after Israel refused to apologise for its deadly raid on a Gaza-bound Turkish-flagged aid flotilla that killed nine pro-Palestinian activists last year.

"To many, the fact that diplomatic ties were not severed, only downgraded, is sign that they can pick up again," Al Jazeera's Hashem Ahelbarra, reporting from Istanbul, said.

"However, the official line from Ankara is that the first measure has to come from Israel. They have to make an apology and a compensation for the flotilla raid."

Turks staged major anti-Israel rallies after an Israeli raid on a Gaza-bound aid flotilla killed nine activists [EPA]

Panetta said it was in the interests of Israel as well as Turkey, a NATO ally of the US, to reconcile. 

The defence secretary said he would take that message to Ankara when he visits there in two weeks.

Gideon Levy, a columnist with the Israeli newspaper Haaretz, said that as long as occupation and operations such as 2008-2009 assault on Gaza continue, Israel will be more and more isolated.

"Part of this isolation is made by Israel's own hands," he told Al Jazeera. "Obviously the present government, which is the most right-wing and most nationalist Israel has ever had, is contributing more to it than the previous government.

"It's an existential threat for the future of Israel much more than the [alleged] Iran bomb."

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

Israel's relations with its neighbour are tense after protesters invaded the Israeli embassy in Cairo in September, angered by a clash that killed five border guards.

'Great threat'

Commenting on Iran, Panetta underscored the US president's determination to stop the country from acquiring nuclear weapons.

"No greater threat exists to the security and prosperity of the Middle East than a nuclear-armed Iran,'' he said, adding that Barack Obama has not ruled out using military force to stop Iran from going nuclear.

However, Panetta cautioned against an Israeli or US military attack on Iran's nuclear facilities.

He said such an attack would "at best" delay Iran's nuclear programme by one or two years.

Among the unintended consequences, he said, would be an increase in regional support for Iran and the likelihood of Iranian retaliation against US forces and bases in the Middle East.

It also would have harmful economic consequences and could lead to military escalation, he said.

"We have to be careful about the unintended consequences" of an Israeli or US attack, he said.