Former U.S. President Jimmy Carter, who helped broker the 1979 Camp David peace accords, said Israel faced a make-or-break moment after President Barack Obama called on the Jewish state to freeze settlement building, Reuters reported.
Obama, who supports a two-state solution to the Israeli-Palestinian conflict, said in his speech from Cairo on Thursday that Palestinians must abandon violence and urged them to acknowledge Israel's right to exist. He also said Israel should stop building settlements in the West Bank.
That policy is at odds with the right-leaning government of Israeli Prime Minister Benjamin Netanyahu who says that construction will continue in existing settlements in the West Bank and has not publicly endorsed a two-state solution.
"Netanyahu now has a decision to make," Carter told Reuters in an interivew in Beirut where his Carter Center has observers monitoring Lebanon's parliamentary election on Sunday.
"'Am I going to publicly defy the President of the United States? Not only in private conversations in the Oval Office but to the world audience, or am I going to maintain the relationship that is extremely important to Israeli people of harmony between the Prime Minister and the President?
Carter said Obama's call for a settlement-freeze was "profoundly important" and acknowledged that it was very difficult for Israelis to accept that.
"I don't see any possibility of having peace between Israel and the Palestinians if Israel continues to expand its settlements," he said.
Carter said he thought it was unlikely that Israel, which has repeatedly described Tehran's uranium enrichment as a threat to its existence, would launch an attack on Iran.
Israel had issued contradictory signals earlier this week on whether it might bomb Iran, with its foreign minister saying there were no such plans and the defense minister saying all options were on the table.
"I don't believe that Israel has received any sort of encouragement from the White House to proceed with a military adventure against Iran. And I don't see any indication that Obama is planning any sort of military option," Carter said.
"It would be extremely foolish if they (Israel) should do so. The consequences would be very severe. I don't think Iran, as a sovereign nation, would accept a military attack ... without responding with utmost capability, and I think that would be a very strong response."
Iran rejects accusations by the West that its nuclear program is for making bombs and says it will retaliate for any attack with missile strikes against Israel and U.S. Gulf assets.
Breaking away from the policies of George W. Bush, Obama has offered improved ties with Iran if it "unclenches its fist."
Tehran says it wants to see a real shift in U.S. policies.
"I think it (speech) was designed to show that the United States is perfectly willing to move toward a harmonious relationship with Iran as possible," Carter said.
Carter praised Obama's speech in which he called for a "new beginning" in ties between Washington and the Islamic world "as one that was committed to peace, harmony, cooperation."
"It was a wonderful speech, carefully prepared, well-balanced, between interests of different listeners."