"I think that we have seen in Iraq that once war is unleashed, it becomes unpredictable. And I think that the consequences of a conflict -- a military conflict with Iran could be quite dramatic. And therefore, I would counsel against military action, except as a last resort and if we felt that our vital interests were threatened," Gates told the Senate Armed Services Committee at his nomination hearing Tuesday.

Gates answer suggests he would not embrace a pre-emptive war like the one declared on Iraq in 2003 despite the fact that Iran is closer to developing a nuclear weapon than Iraq apparently was in 2003, and has known ties to the terrorist group Hezbollah.

Iran has admitted to enriching uranium, a necessary ingredient for a nuclear warhead, and Iranian agents are believed to be exporting sophisticated bombs into Iraq, as well has helping illegal Shiite militias in a growing sectarian conflict against Sunnis.

For its part, Syria is believed by the U.S. government to be a home base for Sunni insurgents and a way station for foreign fighters, who retreat across the border for supplies, money and medical treatment.

Gates warned that Iran would retaliate to a U.S. military attack not with a conventional strike of its own but with terrorist attacks, cutting off the Persian Gulf to oil exporters, and getting far more involved in anti-American activities in Iraq.

"I think that while Iran cannot attack us directly militarily, I think that their capacity to potentially close off the Persian Gulf to all exports of oil, their potential to unleash a significant wave of terror both in the -- well, in the Middle East and in Europe and even here in this country is very real. They are certainly not being helpful in Iraq and are doing us -- I think doing damage to our interests there, but I think they could do a lot more to hurt our effort in Iraq," he said.

"I think that they could provide certain kinds of weapons of mass destruction, particularly chemical and biological weapons, to terrorist groups. Their ability to get Hezbollah to further destabilize Lebanon I think is very real. So I think that while their ability to retaliate against us in a conventional military way is quite limited, they have the capacity to do all of the things, and perhaps more, that I just described," he said.

He said Syria poses less of a retaliatory threat than Iran. However, a military attack on Syria would further damage U.S. relationships throughout the Middle East.

"I think that it would give rise to significantly greater anti-Americanism than we have seen to date. I think it would immensely complicate our relationships with virtually every country in the region," he said.

Gates said he will consider all options for dealing with Iran and Syria, both of which are "unhelpfully" involved in Iraq's chaos and violence.

"I do believe that long-term stability in Iraq will be influenced by Syria and Iran, and I think that we need to look at ways, either incentives or disincentives, to bring them to try and be constructive in terms of the state on their border. How we do that, I don't have any specific ideas at this point, and whether that involves negotiations or sitting down with them now by ourselves or in an international conference or putting it off until some later date, I think along the lines of keeping our options open at least merits thinking about," he said.

That said, Gates said negotiations with Iran would likely be fruitless for the United States.

"I'm not optimistic that a negotiation with Iran would provide a lot of benefit. I know that -- as you well know, I co-chaired this Council on Foreign Relations study on U.S. policy toward Iran in 2004, with Dr. (Zbigniew) Brzezinski, President Carter's national security adviser, and we recommended a negotiation with Iran. But I would say that the conditions have changed fairly dramatically since we wrote that report. Among other things, Iran has a new leader who is quite unambiguous about his views of the rest of the world," he said, referring to President Mahmoud Ahmadinejad who has expressed his approval several times for annihilating Israel.

"Iran has gone from doing some things in 2004 that were harmful to our effort in Iraq, but also some things that could be perceived as being helpful to us, as far as I can tell, to being entirely negative now. They are clearly helping Hezbollah train fighters. So I think that -- I think the circumstances that led to the -- to our recommendations in 2004 have changed in some important ways."

Iran has a strategic interest in trying to move Iraq toward embracing a Shi'ite theocracy similar to its own, Gates said.

"I think that the Iranians will seek to have as much influence in Iraq as they possibly can. These two states have been adversaries ever since Iraq was created after World War I, and as I just mentioned, they went to war for eight years with each other with terrible costs. They clearly never want to have an enemy like that on their western border again, and I think that their effort will be to try and exercise as much influence in Iraq as possible," he said.

He noted that Iran has been emboldened to meddle in Iraq's politics by failing U.S. efforts to stabilize Baghdad.

"They were quite frightened by having U.S. troops on both their West and East border, Western and Eastern borders. And what I've heard -- and I haven't talked to any intelligence analysts about this -- what I've heard is that the -- because they think things aren't going as well for us, they're not as frightened right now," he said.

But if the situation improves in Iraq, it could give the United States leverage over Iran, Gates said.

"It seems to me that if things do start to go right in Iraq, and we do begin to get the situation stabilized, that may, in turn, bring considerable pressure on them because they'll see that they've got a different kind of state on their Western border than they had anticipated, that may not be as militarily threatening as Saddam Hussein was, but is potentially politically threatening, and also that the U.S. will have shown that we were able to be successful," he said. "It seems to me it could go either way."

Gates also said Iran's apparent efforts to develop a nuclear weapon should not be assumed to be for the purpose of destroying Israel, as Ahmadinejad's rhetoric would suggest, but rather as a deterrent to an attack.

"I think that there are, in fact, higher powers in Iran than he, than the president. And I think that while they are certainly pressing, in my opinion, for a nuclear capability, I think that they would see it in the first instance as a deterrent. They are surrounded by powers with nuclear weapons -- Pakistan to their east, the Russians to the north, the Israelis to the west, and us in the Persian Gulf," Gates said.