Princeton University's associate research scholar and former head of Iran's Foreign Relations Committee at the Supreme National Security Council (SNSC) Hossein Mousavian made the comment during the Manama Dialogue, which concluded yesterday at the Ritz-Carlton Bahrain Hotel and Spa, said a report in the Gulf Daily News (GDN), our sister publication.
He said it was time for the US and Gulf countries to adopt a different approach towards Tehran in the wake of last month's agreement to ease sanctions as part of a deal over Iran's nuclear programme.
"The Middle East continues to be in a state of turmoil as global powers dominate this vulnerable region," he said.
"The situation has further exasperated with tensions between US and Iran for over three decades now because of which neither the West, Iran nor the Arab world has succeeded in achieving their goals."
He said Iran and the GCC countries were neighbours "condemned" to live together during a plenary session entitled International Interest in Middle East Security and Non-Proliferation.
Also taking part were Indian External Affairs Minister Salman Khurshid, chairman of Saudi Arabia's King Faisal Centre for Research and Islamic Studies Prince Turki Al Faisal bin Abdulaziz Al Saud and executive director for research at Harvard University's Belfer Centre for Science and International Affairs Dr Gary Samore.
Mousavian, a former spokesman for Iran's nuclear negotiation team who also helped negotiate the release of Western hostages in Lebanon, claimed a regional bloc that incorporated Iran and Iraq would have avoided the "regional cold war".
"If there was a regional co-operation system rather than the GCC, then this situation of regional cold war between the Iran and GCC would have never happened," he said.
"Saudi Arabia has failed to co-operate in forming this system, while Iran failed in liberating Palestine."
He called on Gulf countries to relax their "hostile attitude" to Iran and place more emphasis on tackling terrorism.
"It's time we focus on rise of terrorism and extreme ideologies under the banner of Al Qaeda in the region including Syria, which is all spilling to neighbours," he said.
"This will result in different Sunni factions and fuel the sectarianism in the Gulf."
However, while Prince Turki agreed with Mousavian that Iran and Saudi Arabia should work on improving relations, he added that it was also time for Iran to show its intentions.
"As a Muslim country, Saudi Arabia receives thousands of Iranian pilgrims who come to perform Umrah or Haj every year and we would like to see some progress to the element of stability and not being suspicious," said Prince Turki.
Mousavian was one of only two Iranian delegates who attended the three-day security summit, along with Iranian Foreign Ministry adviser Dr Seyyed Kazem Sajjadpour.
Iran 'doesn't have bomb but can make it'
Meanwhile, Mousavian also pointed out that Iran does not have a nuclear bomb, but is capable of building one.
However, he said the West should have done more to challenge Israel's possession of nuclear arms.
"The international community exerted pressure on Iran, but there is no nuclear bomb," he said.
"They should have orchestrated their efforts against Israel that has tonnes of nuclear bombs in their arsenal."
He said in 2005 he travelled to the GCC with current Iranian president Hassan Rouhani, who was then the country's top nuclear negotiator, to discuss sharing nuclear technology with its neighbours.
"We met all GCC leaders and spoke about the nuclear issue and sharing our technology, but it was not welcomed," he said.
"The GCC countries spent $75 billion since 2007 to get weapons from the US, which was highlighted in this forum by US Defence Secretary Chuck Hagel."
Mousavian claimed this had resulted in an "over-militarisation" of the region.
"The US should stop militarisation in the region and creating this arms race among its allies," he said.
"Iran has its own capabilities to build tanks, jets, missiles and we have no problem in being transparent about it.
"It (a nuclear bomb) is not something we are after, but can do it when we want."
He also called on Israel to give up its own nuclear weapons and sign the non-proliferation treaty.
"If this is done, then it will be the first step towards getting close to a Middle East free from weapons of mass destruction," he added.