“We’re operating on a crisis basis,” Leon Panetta, who was America’s top spy for most of President Obama’s first term, said on Wednesday at the Fortune Global Forum in San Francisco. “When a crisis occurs, we respond to the crisis. But we don’t have any kind of larger strategy to try to deal with what’s happening in the Middle East, what’s happening with ISIS.”

Panetta, who helped engineer the raid that killed Osama Bin Laden, gave Obama credit for taking risks to confront global flash points in his first term. Since, however, Panetta said the White House appears to be operating from a cautious crouch, leery of getting drawn into another messy war in the Middle East.

“We don’t want to get bogged down in another war, obviously, but you also don’t want to stand back and allow the situation to deteriorate to the point where your national security is jeopardized,” Panetta said. “Because the reality is that if the U.S. doesn’t provide leadership on these issues, nobody else will.”

Panetta suggested that failure to develop a broader strategy imperils the work the administration is doing — including the nuclear deal with Iran — to contain the chaos erupting in the region. “Every arms agreement is a gamble,” Panetta said, but this one was struck “in a vacuum, without an overarching strategy as to how are we going to deal with ISIS and with the threat from Iran.” Instead, Panetta said the U.S. should send a clear signal to the region that it will maintain a major military presence in the region; beef up intelligence and counter-terrorism measures; restore relations with Israel; and develop a NATO-like coalition to coordinate the efforts of Arab allies in containing new threats.

Panetta said there is good news on the terrorism front. He’s confident in the ability of America’s counter-terrorism agencies to disrupt larger-scale September 11-style attacks. But that threat has been replaced by another that’s much tougher to contain — that of a lone-wolf operator returning from an ISIS campaign bent on wreaking havoc at home, or, potentially more dangerous, one radicalized here without ever landing on the radar of U.S. intelligence. “How do you protect against that?” he asked.

But Panetta called cyber warfare the “battlefield of the future.” He said military and intelligence arms of the government are prepared, though other agencies remain vulnerable, as demonstrated by the massive hacking of federal personnel records. And while the private sector is scrambling to catch up, “it’s a hit and miss game. Ultimately, it’s my view we do need a tighter public-private partnership.”

The former CIA chief shared recollections from the deliberations that led to the Bin Laden raid, recalling that then-Secretary of State Hillary Clinton counseled the president that the prize was worth the risk on imperfect intelligence, versus Vice President Joe Biden, who thought it was “too risky.” That subplot was primed to become a major point of contention in the Democratic presidential primary — until Biden announced last month that he would forego the race.