Prime Minister Ehud Olmert told the Knesset Foreign Affairs and Defense Committee yesterday, with reference to the impact on Syria of the recent war in Lebanon, that no country "in our vicinity would take a chance on this or that military move with a marginal tactical goal because it understands the price it would pay. Thus, the fighting in Lebanon was a deterrent act."

Olmert said the Syrians "understand our strategic capabilities in other wars, when we would remove the limitations we placed on ourselves in the fighting in South Lebanon."

Regarding the likelihood of a diplomatic process with Syria, Olmert said, "Syria is the focus of operations for most of the terror organizations against Israel and for the arming of Hezbollah." The prime minister added that "it would take a great deal of imagination to see in this situation potential for dialogue."

Olmert told the committee Israel would be ready to negotiate over the Shaba Farms only if Hezbollah were to disarm and the Lebanese army deploy in the south.

He also said the convergence plan was not as high a priority as it was two months ago.

Committee members from all factions except Kadima had harsh words for Olmert yesterday, after he outlined the war's achievements. Labor MK Matan Vilnai said "this was the first time we were defeated in battle."

MK Limor Livnat (Likud) said, "the government system did not function, the home front was traumatized, and you talk about achievements."

MK Silvan Shalom (Likud) said the war had many failures, which had led to a collapse of public faith that could be restored only with the establishment of a state commission of inquiry, and that the goals of the war had not been achieved.

MK Ran Cohen (Meretz), who called Olmert's appearance before the committee "haughty," said everyone in Israel knows the war is the forerunner for the next one. "This war ended in complete failure," Cohen added.

Banging on the table angrily in response to the criticism, Olmert said, "I'm sorry that some MKs have lost their sense of proportion. Stop exaggerating.

"No danger to Israel was revealed during the past month. You didn't know that Hezbollah had 12,000 missiles in Lebanon? You didn't know that Iran supported them?"

Olmert also told the committee that "there were failures in the war, but there were also amazing achievements. Has the U.S. collapsed after three years in Iraq? What's the panic? We all make mistakes, I first of all."

"What did you think, that there would be a war and nothing would happen to our soldiers," Olmert asked the committee. "The claim that we lost is unfounded. Half of Lebanon is destroyed; is that a loss?"

With regard to the demand for a state commission of inquiry, Olmert said that while he valued the judicial system very highly, "that does not mean that at any given time they have to be the problem-solver."

The prime minister argued that a state commission would paralyze the political and military systems for a long period of time.

Olmert said the Shahak committee appointed by the Defense Minister Amir Peretz to examine the military aspects of the war had to discontinue its investigation because the Military Justice Law does not authorize the committee to ensure the immunity of witnesses it might call to testify.