Though he didn't directly acknowledge the CIA's predator drone program, Panetta said critics that say U.S. drone strikes violate U.S. and international law are "dead wrong."
"We have a responsibility to defend this country and that's what we're doing," Panetta said.
In his first network news interview since becoming CIA director, Panetta gave a surprisingly candid assessment of several other global hot spots.
Iran continues to work on nuclear weapons designs, Panetta said, and they have "enough low-enriched uranium right now for two weapons. They do have to enrich it, fully, in order to get there."
Panetta said, "We would estimate that if they made that decision, it would probably take a year to get there, probably another year to develop the kind of weapon delivery system in order to make that viable."
Sanctions, Panetta said, "will have some impact" on Iran and "could help weaken the regime." But, he said, "Will it deter them from their ambitions with regards to nuclear capability? Probably not."
Asked by Tapper about the likelihood that Israel will strike Iran's nuclear facilities in the next two years, Panetta said Israel feels "more strongly that Iran has already made the decision to proceed with the bomb."
But, he added, "I think they know that sanctions will have an impact, they know that if we continue to push Iran from a diplomatic point of view, that we can have some impact, and I think they're willing to give us the room to be able to try to change Iran diplomatically and culturally and politically as opposed to changing them militarily."
Panetta weighed in on the increasing military tensions on the Korean peninsula, including the recent sinking of a South Korean warship. South Korea has blamed the sinking on a torpedo attack by North Korea, after international investigators examined wreckage from the sunken vessel.
Panetta said the attack could be part of a succession plan to "establish credibility" for the son of North Korean dictator Kim Jong-il, Kim Jong-un.
"That makes it a dangerous period," Panetta said. However, "In the end, they always back away from the brink and I think they'll do that now," he said.
A nuclear weapon falling into the hands of a terrorist is a threat that continues to worry Panetta, but the CIA director said, "We are now in a world in which cyber warfare is very real. It could threaten our grid system. It could threaten our financial system. It could paralyze this country, and I think that's an area we have to pay a lot more attention to."