Daily Israel Report

Panetta: Iran Strike Could Impact World Economy

U.S. Defense Secretary ahead of meeting with Defense Minister Ehud Barak: An attack on Iran could impact world economy.
By Elad Benari
First Publish: 11/18/2011, 8:29 AM

U.S. Defense Secretary Leon Panetta said on Thursday he would raise American concerns about the unintended consequences of any military action against Iran during his upcoming meeting with Defense Minister Ehud Barak, Reuters reported.

Panetta and Barak are due to meet on Friday in Halifax, Canada.

Speaking to reporters traveling with him to Canada, Panetta said the United States believed the most effective way to confront Iran still was to use diplomatic pressure and sanctions.

“Obviously to go beyond that raises our concerns about the unintended consequences that could result,” Reuters quoted Panetta as having said.

Echoing remarks he made last week, Panetta pointed to a U.S. analysis that a strike on Iran would set back its nuclear program by one or two years at most.

Finally, he said, “there are going to be economic consequences to that, that could impact not just on our economy but the world economy. “So those things all need to be considered.”

Asked what message he will deliver to Barak during their meeting, Panetta said, “I’ve made those points before and I'll discuss them again.”

“The United States feels strongly that the way to deal with that is to work with our allies, to work with the international community to develop the sanctions and the diplomatic efforts that would further isolate Iran," he emphasized. “That is the most effective way to confront them at this point.”

There has been growing speculation that Israel might launch a military strike on Iran, particularly after the IAEA report last week which said there is credible intelligence that Iran is seeking nuclear weapons technology.

On Wednesday, Barak told interviewer Charlie Rose that the only way to stop Iran’s nuclear program is to have world powers “join hands” and place crippling sanctions on the Islamic Republic.

“I’m convinced that if such crippling sanctions would materialize, they will have to stop it,” Barak said. “But I have no illusions that that’s going to happen. The Chinese, the Russians and other countries for their own reasons feel that this would cause major damage and I can understand it.”