Hamas wants to create a "balance of terror" with Israel in the Gaza Strip, in order to deter the Israel Defense Forces from making a major ground forces incursion into the territory, IDF officers have concluded on the basis of the organization's greatly accelerated munitions acquisitions over the past few months.

Since the beginning of the year, more than 20 tons of explosives, anti-aircraft missiles and antitank missiles have been smuggled into Gaza.

Senior IDF officers told Haaretz recently that Hamas is working to improve its offensive capabilities, with an emphasis on Qassam and Katyusha rockets, while at the same time establishing a solid defensive position in order to prevent the IDF from entering built-up areas within the Strip. By increasing the range of its missiles, the deadly force of their warheads and above all, by using high-quality blast explosives, Hamas hopes to heighten the threat to the northern and western Negev from the direction of Gaza.

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The head of MI's reseach brigade, Brigadier General Yossi Baidatz, said the movement of these weapons could greatly endanger the lives of Israel Air Force troops operating in the skies above the Gaza Strip, and would require the army to consider a different and stronger approach to its activities in Gaza.

Government spokeswoman Miri Eisin said the weapons are coming from Iran and "other countries that sell them." She was concerned that Palestinian militants are learning "how to use the new weapons, and especially how the Palestinians can fight against Israel the way that Hezbollah fought in Lebanon."

Baidatz also said the army had unequivocal proof that the smuggling of weapons from Syria to Lebanon was continuing with the knowledge of the government in Damascus and against the terms of a United Nations-brokered cease-fire.

He said that Syrian President Bashar Assad was preparing his army for possible confrontation with Israel. The Syrian army had not returned to their routine positions since the end of the second war in Lebanon.

Baidatz said Syria was more prepared to take a defensive, rather than offensive position, as Assad believed that Israel would attempt to attack Syria.

"Assad is continuing with his double messages," Baidatz said. "On the one hand he is talking about strategic allegiance to peace, but on the other hand he is also talking about confrontation with Israel and saying that Israel is not ripe for such a political process."

Baidatz also said Assad was still supporting terrorist organizations, including Hamas, Hezbollah and the Islamic Jihad.

Olmert rejects possibility of peace talks with Syria
Prime Minister Ehud Olmert on Sunday rejected the possibility of talks with Assad, saying the Syrian president was responsible for harboring terrorists and was attempting to destabilize the entire region, an official said.

Israel has accused Syria of providing weapons to the Hezbollah guerrillas before and during the recent war in Lebanon. Olmert said that since an August 14 cease-fire went into effect, Syria has continued to meddle in Lebanese affairs and tried to undermine the country's pro-Western prime minister.

"It is not by chance that there is a Syrian decision together with Hezbollah to bring down the Prime Minister of Lebanon, [Fuad] Siniora," Olmert was quoted as telling ministers in Sunday's Cabinet meeting.

"This is the same Assad with whom we are supposed to have a diplomatic process while Khaled Meshal operates freely in his land?" he said. "This is the same Assad with whom we are supposed to have delusional talks about peace?"

Meshal is the exiled political chief of Hamas, based in Damascus, who leads the Islamic militant group's hardline approach of refusing the recognize Israel and renounce violence.

The official, who attended the meeting, spoke on condition of anonymity because he wasn't authorized to discuss the matter on the record.

"We want to make peace - peace with Israel," Assad told the German magazine Der Spiegel last month. In an interview with the British Broadcasting Corp. broadcast last week, Assad said it remained to be seen whether Israel had the will to make peace.

During Sunday's Cabinet meeting, a senior military intelligence official said that Syria was preparing its army for a possible military conflict with Israel and was continuing to support the violent Hamas, Islamic Jihad and Hezbollah groups.

The official also said Syria was trying to smuggle weapons into Lebanon despite the arms embargo mandated in UN Resolution 1701, which included the cease-fire to halt the summer's war.

Olmert instructed the military to provide him with evidence of the arms smuggling.

Olmert added that ultimately the greatest threat to Israel came from Iran, and he was concerned about the precedent set by the nuclear test conducted last week by North Korea.

"Whoever takes the Korean matter lightly will soon find a nuclear weapon in Iran and ultimately a nuclear weapon in al-Qaida," he said.

Spanish FM: No Mideast peace if Israel-Syria relationship not fixed
There can be no comprehensive and final peace in the Middle East
without Syria, Spanish Foreign Minister Miguel Angel Moratinos said Sunday.

"There will be no final peace in the Middle East if there is no solution of the Syrian-Israeli relationship. If we need a comprehensive peace, all actors have to be involved in a peaceful agenda," Moratinos told reporters at the Damascus airport before departing for Turkey.

During a two-day visit to Syria, Moratinos held talks with Syrian President Assad and Foreign Minister Walid Moallem on ways to revive the stalled Middle East peace process.

Moratinos said he won a pledge from Assad to work for peace in the region.

"That's what I have got from President Assad and Moallem. ... They conveyed to me a genuine wish and will to work in a constructive and positive manner," he said.

Israeli-Syrian peace talks broke down in 2000, with Syria demanding assurances that Israel would return the Golan Heights, a strategic plateau that Israel captured in the 1967 Six Day War. Israel wanted modifications to the pre-1967 border and insisted that the issues of security arrangements and normalization be spelled out first.

Moratinos said that he believes, from the Spanish point of view, that the only way to bring peace and stability to the region is to have "contacts and dialogue and engagement of all actors, the main actors in the region."

Syria is "part of the solution and not part of the problem," Moratinos said.

He added that Syria wants to be involved in promoting peace in the region and that "the only way to achieve this is to have talks in order to overcome the pending issues that are still affecting the region's stability."

Moratinos said that he was visiting Syria on behalf of Spain, not the European Union. He is the only Western official who has visited Syria after U.S. and European officials stopped coming here following last year's assassination of former Lebanese Prime Minister Rafik Hariri.

Anti-Syrian Lebanese have blamed Syria for the killing. Syria has denied involvement in Hariri's murder.