Israel needed "to lean forward on efforts to achieve peace with the Palestinians," Panetta said US Defense Secretary Leon Panetta  urged Israel to try and end its increasing regional "isolation" by repairing diplomatic ties with Egypt and Turkey and renewing peace efforts with the Palestinians.
"Unfortunately, over the past year, we've 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," he said.
But Panetta added in a speech that Israel was not entirely to blame for its difficult position and the US ally was the subject of an "international campaign" designed to isolate the country.
The US defense chief said he understood Israel's anxieties over turmoil in the Middle East but said the Arab spring offered an opportunity for the country to forge a more secure place in the region.
It was crucial for Israel to reach out and "mend fences" with countries such as Turkey, Egypt and Jordan that he said share an interest in regional stability, said Panetta, who issued similar appeals in a visit to the region in October.
He said he was "troubled" over the direction of Turkish-Israeli relations and called on both countries "to do more to put their relationship back on track."
As for Egypt, he said the United States shared Israel's concerns about security in the Sinai peninsula and over the recent attack on the Israeli embassy in Cairo.
But the best response was to step up "communication and cooperation with Egyptian authorities" instead of "stepping away from them," he said.
Israel needed "to lean forward on efforts to achieve peace with the Palestinians," Panetta said at an event organized by the Brookings Institution's Saban Center for the Middle East, a Washington think-tank.
After his speech, Panetta took questions from the audience and was asked what concrete steps Israel needed to take to promote peace with the Palestinians.
"Just get to the damn table," he said, using his trademark colorful language to call on Israel to return to the negotiating table.
"The problem right now is we can't get them to the damn table."
While appealing to Israel to reach out to its regional neighbors, Panetta reaffirmed that President Barack Obama's administration was determined "to safeguard Israel's security."
The Pentagon chief also pledged Washington would ensure Israel continues to enjoy a clear military edge by providing the Jewish state with sophisticated missile defenses and new stealthy F-35 fighter jets.
He vowed to prevent Iran from obtaining nuclear weapons, saying the Obama administration had not ruled out possible military action.
But he argued the best approach was to focus on diplomacy and sanctions rather than military intervention to persuade Tehran to abandon its nuclear ambitions, calling armed action "a last resort."
He repeated his view that a strike against Iran would only delay its nuclear project by one to two years and would run the risk of "unintended consequences" for the region.
Amid speculation Israel may take pre-emptive action to prevent Tehran from acquiring nuclear weapons, the US defense secretary has voiced misgivings about bombing Iran in recent public remarks.
But for the first time Friday, Panetta -- the former director of the CIA -- suggested Iran's underground nuclear facilities might survive air strikes.
"Frankly, some of those targets are very difficult to get at," he said.
Analysts have often pointed out that Iran has sought to hide sensitive nuclear sites in underground facilities, and Western officials privately acknowledge that the hidden targets would present a challenge to any military attack.
Panetta also reiterated his view that a strike against Iran could benefit the regime in Tehran at a moment when it is "off-balance" and out of step with popular uprisings sweeping the region.