Tension remained high on Israel's northern border yesterday, despite President Shimon Peres' statement that he did not foresee war with Lebanon in the near future. Syrian President Bashar Assad, who yesterday hosted Iranian President Mahmoud Ahmadinejad in Damascus, said Syria was preparing for Israeli aggression.

While Peres called on Assad to choose between the axis of peace and the axis of evil, Assad emphasized the special relations between Damascus and Tehran. Ahmadinejad said he would advance a vision of a new Middle East with "no Zionists and no colonialists."

Israel Defense Forces Chief of Staff Gabi Ashkenazi said yesterday that Israel has no interest in a regional escalation.

Assad defied U.S. calls to curb its ties with Iran yesterday, saying his long-standing alliance with Tehran remains strong despite overtures from Washington intended to shift his loyalties. With Ahmadinejad by his side, Assad told America not to dictate relationships in the Middle East.

"I find it strange how they talk about Middle East stability and at the same time talk about dividing two countries," Assad told reporters when asked about Secretary of State Hillary Clinton's call on Wednesday for Syria to move away from Iran. Taking a further swipe at Clinton, he said that perhaps he and Ahmadinejad had misunderstood, due to a translation error or their own limited understanding.

In a show of unity, the two signed an agreement canceling travel visas between their countries.

Clinton said Wednesday that the recent decision to send an ambassador to Syria did not mean American concerns about that country have been addressed.

Speaking to lawmakers in Washington, Clinton said the nomination of career diplomat Robert Ford signaled a slight opening with Syria. But she said the administration remained troubled by Syria's alleged support for militant groups in Iraq and elsewhere, interference in Lebanon and close relationship with Iran.

Assad called America's conduct "a new kind of colonialism," while his guest urged the Americans to "pack their bags and leave the Middle East."

Assad said he did not know if recent Israeli statements reflect an intention to attack. But "we're facing an entity that can always launch aggressive acts, and we are preparing ourselves for Israeli aggression, small or large," he said.

Last week, Ahmadinejad warned that Israel was planning to attack Syria and Lebanon, adding to the tension in the region. Prime Minister Benjamin Netanyahu denied this.

Hezbollah's television network Al-Manar reported yesterday that Israel Air Force planes had flown low over the outskirts of Beirut.

Western intelligence sources say Iran is escalating tensions with Israel deliberately to alleviate American pressure on it. Senior IDF sources said recently that neither Syria nor Hezbollah have an interest in starting a war with Israel.

Defense Minister Ehud Barak told U.S. Defense Secretary Robert Gates in Washington yesterday that Israel was concerned over Iran's negative influence on the region and urged him to restrain the ties between Iran, Syria and Hezbollah.

Peres warned yesterday that the chance of peace with Syria is about to dissipate.

"A peace deal with Syria could have been signed 30 years ago, as was done with Egypt," Peres said at a ceremony in Tel Hai. "It was not we who delayed a deal, it was the Syrians. Syria believed time would be on its side."

"The problem in the Middle East is not the Palestinian problem; that will be solved as part of the peace process with Israel," he added. "The central problem is Iran's effort to control it. The central problem is Ahmadinejad's insanity."

"Assad needs to decide: to go with Iran on the axis of evil and terror or to make peace with Israel," Peres stressed.

He also accused Hezbollah of threatening peace in the region and blamed Iran for manipulating Hezbollah. "Iran and Hezbollah use Israel as an excuse to hide their real goal, which is Iranian hegemony over the Arab world," he said.