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U.S. Secretary of State Hillary Clinton cautioned Israel's right-wing government on Thursday that it risked losing Arab support for fighting any threats from Iran if it shuns Palestinian peace talks.

Signaling U.S. impatience with Prime Minister Benjamin Netanyahu's reticence over peace talks, Clinton said Arab nations had made clear to her that Israel must be committed to the Palestinian peace process if it wants help countering Iran.

"For Israel to get the kind of strong support it is looking for vis-a-vis Iran, it can't stay on the sidelines with respect to the Palestinians and the peace efforts. They go hand in hand," she told the House of Representatives Appropriations Committee.

Israel sees a nuclear-armed threat as a mortal threat.

"They [Arab countries] believe that Israel's willingness to re-enter into discussions with the Palestinian Authority strengthens them in being able to deal with Iran," she added.

Since coming into power last month, Netanyahu and his right-leaning coalition have avoided recognizing the Palestinians' right to an independent state as his predecessor Ehud Olmert did.

The United States is committed to pushing for a two-state solution, with Israelis and Palestinians living side by side, and would like to revive stalled talks.

Netanyahu is set to visit Washington early next month. Clinton said she was not going to prejudge the Israeli position until there had been face-to-face talks with him.

"The prime minister will be coming to Washington in May, and we think that it is important not to prejudge what their view is and how that can best be approached," she said.

Lawmakers put pressure on Clinton over a funding request for the Palestinians, saying there must be strong assurances that none of the money would go to the militant group Hamas if it were included in a future unity government under discussion.

Clinton said the State Department would carefully track assistance and additional steps being taken to ensure that no U.S. taxpayer money goes to Hamas.

"No aid will flow to Hamas or any entity controlled by Hamas," she added.

But New York Democratic Rep. Nita Lowey, who has previously put holds on money earmarked for the Palestinians, questioned what she said was some "flexibility" in the Obama administration's approach.

Clinton reiterated that the Obama administration expected any new government that included Hamas to meet three international conditions - to recognize Israel, renounce violence and sign on to previous Palestinian peace accords.

But Clinton hinted that some flexibility might be needed, pointing to U.S. funding for Lebanon, whose government includes the militant group Hezbollah.

"We are doing that because we think, on balance, it is in the interest of the United States," she said.

Clinton also took the opportunity to criticize her predecessors, calling the policy of the Bush administration on Iran a "failure."

She said that the Bush administration's failed eight-year effort to isolate Iran has only increased worries about Iranian influence. She described the Bush approach as one of attempting total isolation of the Iranian government.

"The Bush policy did not deter Iran one bit in its ambitions to acquire nuclear weapons and to support terror organizations like Hezbollah and Hamas," she told the committee, adding that the Islamic republic's nuclear program has continued unabated.

The Obama administration is trying a different approach by offering to engage in dialogue with the Iranians.