Thank you, Michael, for that very kind introduction. Congratulations on becoming AIPAC's new president. And thank you. Thank you for your lifelong dedication to a strong U.S.-Israel relationship.

It's my great honor to be here and to be the first secretary of Defense to address the AIPAC Policy Conference in more than 20 years. I come here as secretary, but more significantly, I come here as a lifelong friend of Israel. A few weeks ago I had the opportunity to sit down with Howard Kohr and Lee Rosenberg in my office at the Pentagon. They briefed me on how they saw the future of the U.S.-Israel relationship. And together we discussed ways to strengthen, to enhance, and to deepen the security relationship between the United States and our great ally Israel. This commitment to an even stronger U.S.-Israeli relationship is one that is shared by the president, by me as secretary of Defense, and by my entire military and civilian leadership at the Department of Defense.

The strength of that shared commitment is reflected in the size and the makeup of this audience. Your presence here today is a testament to the broad and unshakable support that the American people, the American leaders of all backgrounds have for Israel. I am told that there are more than 1,500 students from hundreds of campuses in attendance. My wife and I, as some of you may know, developed a Public Policy Institute, the purpose of which is to inspire public service. And that's exactly what AIPAC does here.

As current and future leaders come together, you send a strong and an unmistakable signal to the entire world that the United States and Israel stand together. Our shared values, our shared interests, and our shared desire to work together are absolutely essential to the security interests of both nations and to a peaceful and prosperous Middle East. As a former member of Congress representing the central coast of California for over 16 years -- thank you, California -- I've had a long-standing respect for AIPAC and for its mission and am proud to consider myself a long-standing ally of this organization.

As chairman of the House Budget Committee in the 1980s and 1990s and then later as OMB director, I had the opportunity to work on budget issues regarding military and economic assistance to Israel. One of my warmest memories is working closely as a member of Congress with my dear friend, Naomi Lauter. She was someone very special to me who served, as many of you know, for many years as AIPAC's regional director based out of San Francisco. I understand her son Sam is here and carries on her great work.

I should also mention that I have a personal connection to Israel that dates back to my days as a member of Congress. For more than 10 years I shared a house with a group of fellow congressmen right here in the District of Columbia. If you've seen the movie Animal House, you'll have some idea what that was like. One of the members of that exclusive fraternity was Chuck Schumer, someone that many of you know and that many of you understand has a tremendous passion for Israel that is deep and infectious.

We slept in the bottom of that house living room area, and every night before we went to sleep, he made me say the Shema. I made him say the Hail Mary. He learned from my passion as an Italian, and I learned from his passion for Israel, particularly when I think it was a little over 20 years ago that he and I and some of our dearest friends made a visit and traveled to Israel together.

That visit was in August of 1991, and it left a very deep and a very lasting impression on me. It was at a time when hundreds of thousands of Jews from the Soviet Union were making Aliyah to live a free and a more prosperous life in their historic homeland. That trip gave me an even stronger appreciation for Israel's promise as a Jewish and democratic state. And coming just months after Saddam Hussein's Scud missiles had attacked Tel Aviv and Haifa, the visit also underscored the complex array of security threats facing Israel by virtue of geography, by virtue of politics, and by virtue of history.

In the years since, I've been honored to work on a vast range of issues of utmost concern to the relationship between Washington and Jerusalem. As a member of President Clinton's cabinet, one of my lasting memories was standing in the south lawn of the White House to witness that historic moment when Yitzhak Rabin courageously extended his hand in peace. And then tragically, after Rabin's death, as President Clinton's chief of staff, I was honored to go to Israel and to bear the burden of seeing the president pay tribute to the memory of his fallen friend.

Whether at a time of tragedy or a time of hope, the courage of the people of Israel is fundamental to its survival. Courage is woven into the fabric of Israel's history and its soul. From Abraham to David to Joshua to the courage of the modern day-IDF, the Jewish people have shown in their strength and resilience, and ultimately they have fulfilled their dream to live in their homeland.

When I returned to government as director of the CIA and had the responsibility to confront terrorists whose sole goal was to destroy my country, I had a great appreciation for the terrorism and threats that face Israel every day. And as a consequence, I developed even stronger bonds with my counterparts in the Israeli government, ties of mutual trust and mutual respect and mutual interest that are the cornerstone of unprecedented cooperation that now exists between our two governments.

During my tenure as director of the CIA, I consulted regularly with my counterparts in Mossad, directors Meir Dagan, Tamir Pardo. And I saw the benefits that came from close intelligence relationship between our governments at the very highest levels. And I can tell you that after our operation to get bin Laden, the first congratulations I got were from my buddies in Mossad.

And in my current job as Secretary of Defense, I've been reunited with my dear old friend and counterpart, Ehud Barak. Ehud and I talk frequently. I just met with him for 90 minutes in my office last Wednesday. There is no minister of defense that I've met with more regularly or consulted more often. We talk. We argue. We eat. We are family.

I also met yesterday with my friend Prime Minister Netanyahu. And I've come to know the prime minister well since my days in the Clinton administration, when I was chief of staff, and now have the opportunity to meet with him regularly each time I go to Israel. From these visits -- from these visits to Israel and my frequent meetings with Israeli leaders, I am acutely aware of the dangers that confront Israel and the significance of our defense relationship. As a consequence, the level of cooperation and interaction between our militaries and our intelligence agencies is deeper and stronger and broader than at any other time in my experience in government.

And let me assure you that the security bonds between Israel and the United States will only grow as America goes through a historic turning point after a decade of war. Even in the face of budget reductions imposed by the Congress, the defense strategy that we have designed at the Department of Defense for the future makes very clear our commitment to confront and defeat any adversary any time, anywhere. Although we have ended the mission in Iraq and begun a transition in Afghanistan, the threats in the world that we face are still very real and are still there.

We're involved in a war in Afghanistan. We are still confronting terrorism. As much as we've been able to decimate their leadership and the impact on their command and control, they still remain a threat, whether in Pakistan or Yemen or Somalia. We still have the proliferation of weapons -- weapons of mass destruction and materials that feed into those weapons. We have the threat from Iran. We have the threat from North Korea. We have continuing turmoil in the Middle East. We have rising powers in Asia. We have a new threat -- the threat of cyber-intrusions and attacks. In the face of these threats, we must never rest easy. Too many lives have been lost, and too much blood has been spilt.

The range of security challenges facing both the United States and Israel remains very real. And for that reason, it is absolutely vital that this cooperation continue, and not only continue but deepen. The cornerstone of this unprecedented defense cooperation is our commitment to maintain and expand Israel's qualitative military edge. This is an ironclad pledge which says that the United States will provide whatever support is necessary so that Israel can maintain military superiority over any state or coalition of states as well as non-state actors.

Israel is surrounded by neighbors that have waged wars against it. The Israeli people have been subjected to rocket attacks, to terrorism. And they live in a world where larger nations have threatened to wipe them off the map. Moreover, the Jewish people carry the burden of centuries of exile and persecution and the memory of knowing that six million people were murdered not because of what they did but simply because of who they were.

This is undeniable history and these are the undeniable security concerns of the president. The president made those concerns clear to the U.N. general assembly last year and confirmed them to all of you last Sunday. He has made it a priority to boost Israel's military superiority in the Middle East for another very simple reason. We have no better ally in this critical region of the world.

A strong Israel deters potential aggressors. A strong Israel sends a message to the region and to the world that America will not waver in the defense of our allies. And for this reason, even though we are facing serious fiscal constraints, U.S. security assistance to Israel has increased dramatically since this president took office. This year the president's budget requests $3.1 billion in security assistance to Israel compared to $2.5 billion in 2009.

This is part of a 10-year $30 billion commitment to Israel's security. Over and above this commitment, the president has committed more than $650 million in DOD funding for Israeli missile defense, recognizing that rockets and missiles, whether fired from Gaza or from a field, pose one of the most immediate threats to the security of Israel. This package more than doubles the previous administration's planned level of $320 million over the same period.

On missile defense we are actively working with Israel at all levels. For short-range defense to guard against the continued threat of rocket barrages from Gaza, the administration provided more than $200 million for the Iron Dome rocket defense system, support that has enabled the fielding of a third and fourth battery of that proven system. Iron Dome is fielded. It is operational. And this new system has already saved the lives of Israeli citizens with over 30 real world successful hit to kill intercepts in 2011. Iron Dome is but one layer, one layer in a comprehensive multi-layered rocket and missile defense system that is being built as a result of close United States and Israeli partnerships.

We are proceeding to implement medium-range missile defense with David's Sling and upper-tier ballistic missile defense with the Arrow-3 system. We are also working to upgrade Israel's Patriot missile system and batteries. We are committed to moving forward with all of these systems and more because, as the prime minister told me, and I agree, these missile shields do not start wars. They prevent wars.

Supporting Israel's missile defense is important because it saves Israeli lives. Beyond missile defense, we must also ensure Israel's qualitative military edge by equipping them with the highly advanced weapons that are restricted to only the closest of our allies and partners. As just one example, the United States will ensure that Israel continues to enjoy unquestioned air superiority by delivering to Israel the advanced fifth-generation stealth fighter aircraft, the F-35 Joint Fighter. The F-35 is the future of tactical aviation for the United States military. And providing Israel with this advanced fighter makes it the only country in the Middle East with a true fifth-generation fighter capacity, upholding Israel's edge not just now but for years to come.

But providing military hardware is only part of our support for Israel's military superiority. Another way is to continue to hone our operational concepts to build greater capability to improve the partnership through realistic exercises and joint training and personnel exchanges. Each year the United States and Israeli forces take part in numerous exercises. For example, in 2010 more than 1,000 U.S. troops participated in the missile defense exercise Juniper Cobra. This year we have scheduled an even larger exercise, Austere Challenge, which will involve more than 3,000 U.S. troops.

Going forward we are also committed to exploring with Israel cooperative ways that the Department of Defense and the Israeli Defense Forces can join together in order to reduce our dependencies on oil. DOD is developing alternative fuels, greening out our fleet, testing planes with bio-blends, and making bases net neutral on the power grid. Together we must find ways to reduce our dependence on oil.

This kind of cooperation is mutually beneficial to both my country and to Israel. It has made both of our militaries stronger. It has made both of our countries safer. And it has saved American and Israeli lives. For example, it was an Israeli company that met the call to help protect American soldiers serving in Iraq and Afghanistan by surging production of up-armor kits for Humvees and mine-resistant vehicles. The kits were made at an Israeli kibbutz, and they saved the lives of our men and women in uniform.

One of my most solemn duties in this job as Secretary of Defense -- and one, frankly, that is the most difficult -- is to write condolence letters to the families of our service members who make the ultimate sacrifice for their country and for our freedom. It's difficult to take the time to sit and to write those families who have lost their loved ones. And I say to them that as difficult as this moment is, that by virtue of their giving their lives to this country, the ultimate sacrifice, they are heroes and they are patriots and we will never forget them.

I wrote one recently to a young boy whose father died in Afghanistan. And I can tell you with each letter I thank God to those whose lives have been saved. There are simply no words that can adequately thank the people of the kibbutz whose ingenuity have allowed fathers and mothers to be able to come home to their sons and daughters.

This level of cooperation, technological, strategic in every way, is absolutely essential because we are clearly confronting a time of great turmoil and uncertainty in the Middle East. And when it comes to the challenges in the region, none is of greater concern than Iran. No greater threat exists to the security of Israel and to the entire region and indeed to the United States than a nuclear-armed Iran. As the president made clear here on Sunday and as he has said consistently, the United States is determined to prevent Iran from obtaining a nuclear weapon. Let me be clear. We do not have a policy of containment. We have a policy of preventing Iran from acquiring nuclear weapons.

This administration has applied unprecedented pressure on the Iranian regime, and they face crippling sanctions and growing isolation. Their closest ally, the Assad regime of Syria, is collapsing. And the Iranians now face the choice to either meet their international obligations and rejoin the community of nations or violate their international obligations and face the consequences. We have made clear to the regime in Tehran and to our allies in the region we want diplomacy to work. We'll back the diplomacy with strong and increasing pressure. We will keep all options, including military action on the table, to prevent them from obtaining a nuclear weapon.

As the president made clear, the United States does not bluff. In this town it's easy to talk tough. Acting tough is a hell of a lot more important. The president ordered 30,000 additional troops to battle in Afghanistan to confront a resurgent Taliban. He launched a comprehensive precision bombing campaign to protect the Libyan people and ultimately toppled a brutal dictator.

He has ordered U.S. warships to pass through the Straits of Hormuz despite the threats that we have received from Iran. And he has been the driving force behind the most successful and lethal counterterrorism campaign in U.S. history, culminating in the bold decision to send U.S. special operations forced hundreds of miles into Pakistan to take the risk to take down bin Laden. And he did.

The president has shown that we will do whatever is necessary to protect our people, to protect our allies, and to protect our interests. Of course we do not make these decisions lightly. As the president said on this stage, these are the most consequential decisions a president must make. Of course we prefer the diplomatic path. And as the prime minister himself has said, military action is the last alternative, when all else fails. But make no mistake, when all else fails, we will act.

I believe, and I truly do, that we will succeed, if the United States and Israel continue to work closely together and forge an international consensus to compel Tehran to change course. That is the kind of benefit that cooperation can bring, that partnership can bring. And I believe that the cooperation is going to be essential to confronting the security challenges of the 21st century. In confronting these challenges, in securing peace, Israel will always have the unshakable backing of the United States. And the United States must always have the unshakable trust of our ally Israel.

Last October, when I traveled to Israel on one of my first trips overseas as secretary of defense, I had the opportunity to visit the Yad Vashem Holocaust Memorial and lay a wreath at the Hall of Remembrance. I told those gathered nearby that it was a very moving experience for me personally because what we learned at Yad Vashem commits all good people to work together to ensure that it never happens again.

That is my pledge and the solemn and sacred pledge of the United States. We are stronger, when we act as one. We are stronger when we work together to support a sovereign and secure Israel. We are stronger when we both embrace our histories that pledge us to fight for what is right and to fight for the dream of giving our children a better and more secure life.

Thank you. And may God bless Israel and may God bless the United States of America.