If there's one silver lining to the Iran nuclear crisis, it's growing cooperation between Israel and its Arab neighbors.

Speaking at a pre-Rosh Hashanah event in Jerusalem on Wednesday, Prime Minister Benjamin Netanyahu said that cooperation between Israel and the Arab world is actually greater today than it was when Jerusalem signed peace agreements with Egypt and Jordan.

"It's a huge change," said Netanyahu, while acknowledging that much of the cooperation is not publicly visible, since countries like Saudi Arabia still don't have official relations with the Jewish state.

Netanyahu urged the Palestinians to recognize the shifting realities and not get left behind by clinging to impossible hard-line demands.