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Prime Minister Ehud Olmert on Sunday denied reports of a planned coordinated offensive in which the U.S. would attack Iran and Israel would hit Syria and Lebanon at the same time.

During a joint press conference with German Chancellor Angela Merkel, Olmert dismissed the idea of a summer offensive, calling it "a plan we don't know of. It is baseless, and an unfounded rumor with no foundation. I hope no one will operate on the basis of unfounded rumor to create a move that would have no reason to drag us into a conflict."

The prime minister's denial came hours after Military Intelligence chief Major-General Amos Yadlin told a cabinet session that Israel is closely monitoring preparations by Syria, Iran and Hezbollah for a U.S.-led war this summer.

According to Yadlin, Iran and Syria believe that a war this summer will be initiated by the U.S. and that Israel will be involved. He said that the preparations were defensive, adding that Iran, Syria and Hezbollah were not expected to initiate the war.

"What we are seeing is their preparation for the possibility of war in the summer. My assessment is that they are defensive preparations for war," Yadlin was quoted by a government official as saying, referring to Iran, Syria and Hezbollah.

"We are closely monitoring these preparations because [Iran, Syria and Hezbollah] could misinterpret various moves in the region," Yadlin said, according to the official.

Yadlin noted that, as in the case of the 1967 Six-Day War, military conflict could erupt despite that fact that neither side is interested in war, because of "the involvement of many players."

Regarding Hamas, Yadlin said that Haniyeh has warned that if the international financial embargo on Gaza is not lifted within three months, a third intifada will break out.

Yadlin added that there senior Hamas members that are displeased with the Saudi Arabian initiative, and that the military branch of Hamas has renewed its activity.

Meanwhile, U.S. House members meeting with Syrian President Bashar Assad Sunday said they believed there was an opportunity for dialogue with the Syrian leadership.

The U.S. House members, who included Virginia Republican Frank Wolf, Pennsylvania Republican Joe Pitts and Alabama Republican Robert Aderholt, also said they had raised with Syrian officials the issue of stopping the alleged flow of foreign fighters from Syria to Iraq.

In a statement issued by the U.S. Embassy in Damascus, the congressmen said they had talked about ending support for Hezbollah and Hamas, recognizing Israel's right to exist in peace and security, and ceasing interference in Lebanon.

"We came because we believe there is an opportunity for dialogue, the statement said. "We are following in the lead of Ronald Reagan, who reached out to the Soviets during the Cold War, it added."

U.S. House Speaker Nancy Pelosi will convey a message to Syria from Olmert that Israel is interested in peace if Damascus stops supporting terrorism, Olmert's spokeswoman said Sunday.

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