With US Defence Secretary Donald Rumsfeld in the audience for the opening of the Asia Security Conference, Goh bluntly told the US that it must adopt a "more balanced and nuanced approach" to Israel's battle with the Palestinians if it was to win the war on terrorism.

Goh also emphasised that although the Middle East was the main battleground for terrorists, the theatre extended across the globe and even in unlikely, homogenous nations such as Japan and South Korea.

"I believe the fight against terrorism will last as many decades as the Cold War," Goh said.

"I hope to persuade you that while there are differences with the Cold War period, the fight against terrorism is no less mortal and certainly far more complex."

Goh said that while terrorists were aiming to overthrow secular governments, initially in the oil-rich Middle East, they were continuing to gain support worldwide through the Israeli-Palestinian conflict.

"This is too important an issue to dress in diplomatic niceties. The US is essential to the solution but it is also part of the problem," he said.

"A more balanced and nuanced approach towards the Israeli-Palestinian conflict -- an approach that recognises that there are equities and inequities on both sides -- must become a central pillar of the global war on terrorism.

"The Israeli-Palestinian conflict is a rallying cause for terrorism. We know that a solution to it will not end terrorism... but the discomfort that mainstream Muslims feel around the world feel with America's Middle East policies limits their ability to fight the ideological battle."

Although Singapore is a small Southeast Asian country, Goh's comments on the Middle East hold added weight because the city-state is a close US ally and has the world's most populous Muslim nation, Indonesia, as a neighbour.

Southeast Asia is also recognised as a frontline in the war on terrorism, with Al-Qaeda linked Jemaah Islamiyah active throughout the region.

Despite his caution on Israel, Goh implored the US, Europe and Asia to unite against the terrorist threat, saying the terrorist AL-Qaeda network and its chief, Osama bin Laden, would refine their techniques to isolate Washington from the rest of the world.

He said many Europeans wanted to believe "some tacit accommodation" with terrorists was possible.

"They fail to see the threat as a long-term problem and that any accommodation by the terrorists will be out of expediency."

Goh also said that the greatest opportunities for Islamic terrorists currently were in Iraq and that the US and its allies must not back away from the battle there.

"The terrorists know that America cannot be defeated militarily. Their target is psychological," he said.

"If they succeed first in breaking the coalition allies' resolve, and later, America's resolve, extremists everywhere will rejoice and be emboldened. They will know that they can defeat even the world's mightiest nation."

Rumsfeld is due to deliver the keynote address on Saturday to the Asia Security Conference, which has attracted seven defence ministers and nearly 200 security officials from 21 nations.

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