Failure in Iraq will unleash sectarian strife and extremism and will be felt first in the Middle East, visiting US Defense Secretary Robert Gates said Wednesday. Speaking to an American Chamber of Commerce luncheon on the third day of his Middle East tour, Gates exhorted Arab countries to use their influence to dampen the insurgency and encourage political reconciliation in Iraq. "Whatever disagreements we might have over how we got to this point in Iraq, the consequences of a failed state in Iraq - of chaos there - will adversely impact the security and prosperity of every nation in the Middle East and Gulf region," he said. He warned that while some who disagree with the war may be cheering for failure in Iraq, "these sentiments are dangerously shortsighted and self-destructive." The initial effects of failure, he said, will first be felt in Middle East capitals and communities "well before they are felt in Washington or New York."