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Panetta warns 'isolated' Israel

US defence secretary Leon Panetta has warned that Israel was becoming increasingly isolated in the Middle East and its leaders must restart negotiations with the Palestinians and work to restore relations with Egypt and Turkey.

In a blunt assessment made as he was travelling to Israel, Mr Panetta said the continuing upheaval in the Middle East made it critical for the Israelis to find ways to communicate with other nations in the region in order to have stability.

"There's not much question in my mind that they maintain that (military) edge," Mr Panetta told reporters travelling with him. "But the question you have to ask: is it enough to maintain a military edge if you're isolating yourself in the diplomatic arena? Real security can only be achieved by both a strong diplomatic effort as well as a strong effort to project your military strength."

Mr Panetta is due to meet Israeli and Palestinian leaders this week and then travel to a meeting of Nato defence ministers in Brussels.

His visit comes as Middle East negotiators push for a peace deal by the end of next year, stepping up pressure for the resumption of long-stalled talks.

The Pentagon chief said Israel risked eroding its own security if it did not reach out to its neighbours. "It's pretty clear that at this dramatic time in the Middle East, when there have been so many changes, that it is not a good situation for Israel to become increasingly isolated. And that's what's happening," he said.

Mr Panetta said the most important thing now was for Israel and its neighbours "to try to develop better relationships so in the very least they can communicate with each other rather than taking these issues to the streets".

His visit comes at a particularly critical and fragile time. Palestinian president Mahmoud Abbas has asked the United Nations Security Council to recognise an independent Palestinian state in the West Bank, east Jerusalem and Gaza Strip, areas captured by Israel in the 1967 Six Day War.

The United States opposed the UN bid, saying there was no substitute for direct peace negotiations. But with Israel continuing to build settlements in the West Bank and east Jerusalem, Mr Abbas says there is no point in talking.

Some 500,000 Jewish settlers now live in the West Bank and east Jerusalem. Israel withdrew from Gaza in 2005.

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