The former Tory minister and now chancellor of Oxford University also criticised the Israelis for destroying Palestinian infrastructure including the airport, schools, hospitals, police and radio stations over the years.
He said the EU would need assurances from Israel before they would replace the buildings and infrastructure largely put there by the Europeans in the first place.
Mr Patten made his comments after a two-day meeting of 25 European foreign ministers in Tullamore, the constituency of Minister Brian Cowen who chaired the meeting.
They issued a statement warning that any resolution of the Israel-Palestinian conflict had to be negotiated and agreed by both sides. They were widely criticised for their weak response to the Israeli Prime Minister Ariel Sharon's plan to retain control of Palestinian West Bank territory which was backed by US President George Bush.
Asked if Iraq could be compared to Vietnam, Mr Patten said: "Asking if Iraq could become as difficult as Vietnam is misplaced because I think it's arguably much more serious.
"If things go wrong in Iraq it will make it much more difficult for us to deal with the tensions in the Islamic world and the world outside."
Asked if the EU would help with reconstruction of the Gaza Strip once the Israeli's withdraw, he said Europe has been the largest provider of reconstruction finance in the Palestinian territories amounting to some €250 million a year.
"We found that some of the reconstruction assistance has been destroyed needlessly," he said. "Among the projects we financed were the airport and port which were thrashed by the IDF (Israeli Defence Force) so once bitten indeed three or four times bitten not surprisingly we are several times shy of becoming involved again. We would want some assurances from the Israeli's," he said.