Prime Minister Ehud Olmert told the cabinet Sunday that now is not the time to embark on negotiations with Damascus, given that U.S. President George W. Bush is demanding Syrian President Bashar Assad "stop instigating war."

"We need to ask ourselves why, precisely at this moment, Assad is asking to renew negotiations with us," Olmert said. "The considerations that motivate Assad are not necessarily the considerations that motivate us."

He later added that, "Even the German foreign minister was disappointed by his [own] visit to Damascus."

But Defense Minister Amir Peretz, squaring off against Olmert in the Sunday cabinet meeting, said that Israel should hold an "urgent debate" to weigh Syria's recent diplomatic overture to consider entering into negotiations with Damascus.

A diplomatic source in Jerusalem said intelligence officials, including those who support talks with Syria, agree that Syria will not sever ties with Iran, Hezbollah and Palestinian terror organizations even if Israel returns the Golan Heights. Olmert believes the threat of war will only increase if Israel's demands are not met.

But Peretz told the cabinet Sunday that "We must make decisions over the significance of the Syrian arena, and its priority, whether it is important enough in order to enter into negotiations, and whether we have preconditions for negotiations with Syria."

Israel's position must relate to those of Washington and the EU, Peretz continued.

"Any agreement comes with a price tag. In the case of Syria, the price tag is known," Peretz said, in a reference to the Golan Heights, captured from Syria in the 1967 Six-Day War.

"The question is, do we see high strategic importance in a severing of the tie between Syria and the radical axis, and in barring cooperation between Damascus and Hezbollah?"

Israeli military officials said at the weekend that they believe the Syrian proposals should be examined carefully and not dismissed out of hand.

Peretz has for some time been calling for a review of possible talks with Syria, but he is demanding that Assad first prove he is serious about abandoning terror.

Vice Premier Shimon Peres said Saturday in response to the statements from Damascus that Israel has preconditions for negotiations with Syria: the closure of the terror headquarters in Damascus, an end to Meshal's activities there and the suspension of arms deliveries to Hezbollah.

Assad calls on Olmert to heed calls for peace In an interview published Friday in the Italian daily La Repubblica, Syrian President Bashar Assad called on Olmert to heed his calls for peace. "Talk to Syria, and like many Israelis are saying, 'even if you think it's a bluff you have nothing to lose.'"

Assad said he is not acquainted with author David Grossman, who called on Olmert to respond to the peace offers coming from Damascus, but that he is right. The Syrian president said he and others in his country follow the Israeli media, particularly where peace with Syria is concerned.

Syrian Foreign Minister Walid Moallem, meanwhile, told The Washington Post that Syria has no preconditions to negotiations with Israel, not even regarding the Golan Heights. In an interview in Damascus, Moallem told columnist David Ignatius, "A constructive dialogue has to start without preconditions."

Moallem did not bring up Syria's longstanding position that the peace talks must begin from where they left off, but Assad had this to say: "Anyone who wants to start from zero doesn't want to achieve peace, because that means he doesn't agree to things that have already been agreed." Assad also said that Olmert's government is too weak to advance the peace process, because "Peace is much harder than war."

Asked about Israeli intelligence reports about Syrian ground-to-ground missiles clustered on the border with Israel, Assad told the Italian newspaper that Israel and Syria are still at war and that Syria must be ready for an Israeli attack at any moment. He also said that Israel has declared that it is preparing for a war next summer.

"War is always possible in our region. It is natural to prepare (for it)," Assad said. He said that one of the ways to do this is by learning the lessons of previous wars, particularly in the region. He also said, however, that "Amassing missiles is an inexact description" of Syria's actions.

The interviews were the first by the Syrian officials since the publication of the Baker-Hamilton report of the Iraq Study Group findings. Both Assad and Moallem emphasized that Syria is willing to cooperate with the U.S. on regional issues, including Iraq. The interviews focused on Syria's relations with Israel and with the West.

Netanyahu: Syria must first end alliance with 'axis of evil' Likud chair MK Benjamin Netanyahu said negotiations with Syria can begin when that country ends its alliance with the "axis of evil," stops the flow of arms from its territory to Hezbollah and shuts down terror headquarters within its borders. In addition, Israel must coordinate its actions vis-a-vis Syria with the U.S., Netanyahu said.

Aides to Netanyahu emphasized Saturday that Syria needs a peace agreement with Israel no less, and possibly more, than Israel needs a peace agreement with Syria. They stressed that Netanyahu has not changed his position that Israel must remain in the Golan Heights no matter what.