LIMA, Peru — The international community is ready to impose more sanctions against Iran if the country does not begin to address concerns about its nuclear program, US Defense Secretary Leon Panetta said Saturday.

The economic sanctions are having a damaging effect on Iran, as inflation and unemployment rise, and the value of the currency drops, increasing prices.

Iran, said Panetta, has to engage seriously with the international community to resolve issues with its nuclear program. If it doesn’t, “make no mistake, the international community will continue to impose additional sanctions,” Panetta said.

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Panetta also said the continued exchange of artillery fire between Syria and Turkey raises additional concerns that the conflict may escalate and spread to neighboring countries.

He said the US is using its diplomatic channels to relay worries about the fighting in the hopes that it will not broaden.

His comments came on the heels of warnings from Turkey’s prime minister that his country is not far from war with Syria.

Turkish and Syria traded artillery fire Saturday as rebels clashed with President Bashar Assad’s forces near the border, heightening the fears that the crisis could erupt into a regional conflict. Turkish Prime Minister Recep Tayyip Erdogan on Friday cautioned Damascus not to test Turkey’s “limits and determination” and said Ankara was not bluffing in saying it won’t tolerate such acts.

In other comments during a press conference with Peru’s Defense Minister, Pedro Cateriano, Panetta said the US is committed to improving its ability to conduct joint military exercises, training and education exchanges with Peru.

Panetta’s comments came after meetings Saturday with Peruvian President Ollanta Humala. He also said the US is increasing efforts to build partnerships in the region and said America will do whatever it can to provide assistance to Peru to meet the challenges of terrorism, illicit trafficking and humanitarian needs.

Later, he and Cateriano said that they are negotiating an update in the defense cooperation agreement between their two countries.

Noting that the last agreement was sealed in 1952, Panetta said the U.S. is committed to improving its ability to conduct joint military exercises, training and education exchanges with Peru.

Cateriano said updating the agreement will help his country modernize its military.

Panetta was flying on to Uruguay Saturday afternoon to attend a regional meeting of defense ministers from the Americas.