The Iraq Study Group report says any hope for a strong and peaceful Iraq will require securing peace in the larger Middle East and entails dialogue and political engagement between Israel and Iraq's moderate Arab neighbors.

"Given the central importance of the Arab-Israeli conflict to many countries both in and out of the region, the United States must again initiate active negotiations to achieve a stable Arab-Israeli peace on all fronts and in the manner that we outline specifically in the report," former Secretary of State James A. Baker III, co-chairman of the 10-member bipartisan panel, said at a news conference on Capitol Hill Wednesday.

The conference followed the release of the group's 79 recommendations on how to go about reaching a viable solution for Iraq. In its report, the result of interviews, consultations and study of Iraq policy over the last eight months, the ISG said the United States must shift its diplomatic goals toward the political because a military solution won't succeed in ending sectarian violence.

As a result, that means tackling larger diplomatic challenges and calling on Iran and Syria to pitch in, a proposal that is fraught with its own stumbling blocks, commissioners acknowledge.

“Talking to them doesn’t assure you’re going to get anywhere but at least you get a crack at it. You’ve got a chance at it,” said former Democratic Rep. Lee Hamilton of Indiana, also a co-chairman of the commission.

The report says "no American government — Democrat or Republican — will abandon Israel," despite Syria's and Iran's wishes to see the Jewish nation wiped from existence.

Other nations like Egypt, Jordan and Saudi Arabia are more pragmatic. With that in mind, the ISG warns the U.S. government that to ignore larger issues complicating a solution for Iraq will result in no end to the violence there.

"The United States will not be able to achieve its goals in the Middle East unless the United States deals directly with the Arab-Israeli conflict," reads a recommendation from the group. "The United States does its ally Israel no favors in avoiding direct involvement to solve the Arab-Israeli conflict."

Despite administration reluctance to link the two issues, the way to a solution in Iraq, according to the panel, includes unconditional meetings under the auspices of the United States or the Quartet, comprised of the United States, Russia, the European Union and the United Nations, among Israel, Lebanon and Syria on the one hand and Israel and the Palestinians who agree to acknowledge Israel’s right to exist on the other.

"The purpose of these meetings would be to negotiate peace as was done at the Madrid Conference in 1991, and on two separate tracks — one Syrian/Lebanese, and the other Palestinian," the report says.

The Madrid conference was orchestrated by Baker and served as the first time Israel negotiated directly with Jordan, Syria, Lebanon and the Palestinians. A peace accord was reached with Jordan as a result and the conference served as a precursor to the 1994 Oslo Agreement between Israel and the Palestinians.

But according to U.S. officials who spoke with Insight Magazine, a conference planned according to Baker's vision would go off without Israel's presence.

“As Baker sees this, the conference would provide a unique opportunity for the United States to strike a deal without Jewish pressure,” an official is quoted saying in the magazine.

Another official said, “Baker sees his plan as containing something for everybody, except perhaps the Israelis."

Click here to read the Insight Magazine article.

State Department Spokesman Sean McCormack said Wednesday that the ISG's goals for peace in Iraq are no different than any regional actor who wants a "more peaceful, stable, secure, prosperous" Middle East.

"I think if you flip through what their objectives are with respect to Iraq or with respect to trying to peacefully reconcile differences between the Israelis and Palestinians as well as other diplomatic efforts throughout the region, I'm pretty sure it's the same goals here," McCormack said. "They suggest a specific way to achieve some of those goals. And we're going to take a close look at those things."

In an interview with FOX News on Wednesday, Baker said if Syria would come to the table, Israel would benefit.

“We could cure Israel’s Hezbollah problem, furthermore, we could get the Syrians to convince Hamas to accept Israel’s right to exist and that would give Israel a negotiating partner for the Palestinian track,” Baker said.

In the recommendations, the ISG says Syria must adhere to U.N. Security Council resolutions that demand Damascus stay out of Lebanon and cooperate in all investigations into the political assassinations of Lebanese leaders Rafik Hariri and Pierre Gemayel.

Syria must also verify that it has stopped aid to Hezbollah as well as arms shipments to Hezbollah, Hamas and other "radical Palestinian groups." Syria should also convince Hamas of Israel's right to exist, help secure the return of three members of the Israeli Defense Forces who have been missing since summer and seal its border with Iraq.

"In exchange for these actions and in the context of a full and secure peace agreement, the Israelis should return the Golan Heights, with a U.S. security guarantee for Israel that could include an international force on the border, including U.S. troops if requested by both parties," reads one of several commission recommendations on the Arab-Israeli conflict.

"With respect to Syria, there's some strong indications that they would be in a position, if we were able to enter into a constructive dialogue with them, that they would be in a position to help us and might want to help us," Baker said.

"I think all of us feel here that both Iran and Syria have a lot of influence in the region and have a lot of impact on Iraq," Hamilton said. "We will be criticized, I'm sure, for talking with our adversaries. But I do not see how you solve these problems without talking to them."

The report added that the cease-fire agreement reached between the Palestinians and Israelis last month needs to be consolidated. In addition, the parties should adhere to U.N. Security Council Resolutions 242 and 338 and the principle of "land for peace" that will lead to final status talks on borders, settlements, an east Jerusalem capital for the Palestinians and the right of return.

The recommendations also call for lending support to Palestinian President Mahmoud Abbas and the Palestinian Authority to lead negotiations with Israel, and backing of a Palestinian national unity government.

Sen. Norm Coleman said he is supportive of several of the conclusions reached by the ISG and appreciates their work on an intractable problem.

“I am skeptical, however, of the report’s assertion that direct dialogue with Iran and Syria would be productive or wise,” Coleman, R-Minn., said in a statement. “Both of these countries have actively supported the insurgency in Iraq and each would likely demand an untenable trade-off in exchange for their participation.”

Sen. John McCain, R-Ariz., added that the cost of engaging Syria and Iran is too high if it means conceding a nuclear weapon for Iran and continued interference by Syria in Lebanon.

But Sen. Joe Lieberman, D-Conn., said while talks with Iran are a non-starter, he would agree to cooperation with other willing partners. "Iran has exactly the opposite interest in Iraq than we have. They do not want us to succeed in Iraq thus we have to reach out to others in the Middle East — other countries that share our desires."