WASHINGTON - U.S. President George Bush believes that Israel is offering Syria the Golan Heights without getting anything in exchange, according to sources briefed on his White House meeting with Prime Minister Ehud Olmert last week.

After Olmert updated Bush on Israel's indirect talks with Syrian President Bashar Assad, the U.S. president demanded, "Why do you want to give Assad the Golan for nothing?" the sources said.

"It's not for nothing," Olmert insisted. "It's in exchange for a change in the region's strategic alignment."

Bush persisted: "Why should you believe him?" And to that, Olmert did not reply.

The Bush administration has long had reservations about Israel's talks with Syria and refuses to play any active role in them. Infuriated by Syria's involvement in anti-American terror in Iraq, as well as its undermining of Lebanon's fragile democracy, Bush preferred to invest his diplomatic capital in Israeli-Palestinian talks, while eschewing contacts with the Syrians.

Olmert tried to explain the strategic importance that Israel attaches to the talks with Syria, describing the Middle East as being defined by two axes: an extremist "horizontal axis" running from Iran via Syria to Hezbollah and Hamas, and a pragmatic "vertical axis" running from Turkey via Syria to Israel, Jordan and Egypt. Syria, Olmert argued, sits at the intersection of these two axes. Thus should it switch its allegiance to the "vertical axis," this would greatly weaken the extremists and strengthen the pragmatists.

Olmert also believes that Bashar Assad has moved much closer to Iran than his father Hafez ever did. Today, he said, Damascus is locked in an Iranian "bear hug" that threatens the very existence of its secular regime. That, combined with Syria's dismal economy, creates an opportunity to flip Assad into the moderate camp, the premier argued.

U.S. President-elect Barack Obama favors American dialogue with Syria, and would presumably agree to take an active role in Israeli-Syrian talks. Aaron Miller, a veteran of former president Bill Clinton's peace team, published an article in The Washington Post Saturday in which he urged Obama to adopt a "Syria first" strategy.