Tensions between Israel and the Palestinians have an "enormous" effect where U.S. military forces operate in the Muslim world and are closely monitored, the U.S. general who oversees the wars in Iraq and Afghanistan said on Tuesday.

The comments by General David Petraeus, who heads U.S. Central Command, put a spotlight on the concerns among senior officers as they are drawing down U.S. forces in Iraq, carrying out a major troop surge in Afghanistan and preparing for a possible showdown with Iran over its nuclear program.
Tensions with the Obama administration spiked last week when Israel, during a visit by U.S. Vice President Joe Biden, announced plans to build 1,600 homes for Jews in a part of the occupied West Bank it had annexed to Jerusalem.

Neither Israel nor the Palestinian Territories fall under Central Command's area of responsibility but Petraeus told a Senate hearing: "We keep a very close eye on what goes on there because of the impact that it has, obviously, on that part of CentCom that is the Arab world."
The idea of bringing the Palestinian Territories under the Central Command's umbrella has been discussed internally but Petraeus said he has never made that a "formal recommendation" to the Pentagon or the White House.

U.S.-backed Palestinian President Mahmoud Abbas holds sway in the Israeli-occupied West Bank and some of his security forces receive U.S.-funded training in neighboring Jordan.
Abbas's Hamas Islamist rivals, shunned by major Western powers, control the Gaza Strip that borders Egypt.

"Clearly the tensions, the issues and so forth have an enormous effect. They set the strategic context within which we operate in the Central Command area of responsibility," Petraeus said.
"My thrust has generally been, literally, just to encourage that process that can indeed get ... a sense of progress moving forward in the overall peace process because of the effect that it has on particularly what we would term the 'moderate' governments in our area."