The chances of Syria initiating all-out war against Israel are low, Military Intelligence Chief Amos Yadlin told the government on Sunday.

"Syria is building its military strength, but the likelihood of an all out-war at Syria's initiative is low," Yadlin told ministers during a presentation of the annual intelligence report.

Yadlin said he believed the Syrian tendency was to respond, not initiate, military procedures against Israel. He emphasized that Syrian President Bashar Assad has indicated a desire for peace, but said he did not believe Damascus was not prepared to make any actual gestures toward Israel.

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Meanwhile, Mossad chief Meir Dagan has advised Israel not to be deceived by Syrian peace signals, saying they are designed to lift international pressure from Damascus. Still, Dagan has also reasoned that the chances of war with Syria in the coming year are quite low.

Yadlin also said Sunday that Iran "would continue to pursue firmly the development of its nuclear program, despite heavy technological obstacles and despite the threat of sanctions. The leader of Iran will continue to oppose the international community and the United Nations, while at the same time moderate and pragmatic Arab camp will build itself against the Iranian threat.

The intelligence chief added that "the strategic environment of Israel is less stable than it has been in the past because of negative developments which have occurred that are more dangerous than in past years." Yadlin was referring primarily to events that have occurred over the last year with Iran, Syria and Iraq.

According to Yadlin, Iran and Syria are the most extremist elements in the Middle East and both believe that the solution to dealing with Israel is through terrorist means and suicide attacks. Iran also aids local terror groups on every level, including provision of weapons, training and preparation. The primary recipients of this aid, Yadlin said, are Hezbollah and Hamas.

The intelligence chief said that Hezbollah sustained a hard blow during the second war in Lebanon and that its recent activities in southern Lebanon have been very restrained. Still, he said, Hezbollah has invested great efforts and resources into renewing its weapons systems which were harmed during the war and in strengthening its political force in Lebanon.

Meanwhile, the Shin Bet security service said that a Palestinian unity government would not end friction between the Islamic Hamas and more moderate Fatah. The agency said there was also no chance that Palestinian Authority Chairman Mahmoud Abbas would crack down on militants.