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Damascus accused Israel on Monday of building a dam on the Golan Heights to steal water and deprive Syria and Jordan from badly needed resources, Syria's official news agency reported.

Irssan Irssan, head of the water resources department at the town of Quneitra just across the border from the Golan Heights, said Israel started building the dam in July only 10 meters (yards) away from the cease-fire line delineated by a UN peacekeeping force in the area.

"The dam will divert rain water from the Golan Heights and will deprive Syrian farmers and shepherds from the most important resources for their farms and their animals," Irssan said.

A senior Israeli official denied Syria's allegations, saying Israel does not have any dams.

"We are not a country that has enough water to have dams," said the official, who spoke on condition of anonymity because of the sensitivity of the matter.

Israel, however, does have water reservoirs on its streams and creeks to develop agriculture, just as Syria does on its side of the border. The official said the majority of the Golan's water sources flow to the Jordan River and not to Syria.

Quneitra, which lies 65 kilometers (40 miles) southwest of Damascus, is a war-wrecked, abandoned town that was destroyed and seized by Israel in the 1967 Mideast war. It was returned by Israel to Syria as part of a negotiated disengagement after the 1973 Mideast war.

SANA quoted Irssan as saying that the dam Israel was building was one kilometer (0.62 miles) long and 8 meters (yards) high and was being built in the no-man zone of the Golan Heights.

Water from the Golan Heights feeds the Yarmouk River and Wihada reservoir, shared by both Jordan and Syria. The two countries use the reservoir for generating some 18,000 megawatts of electricity.

Irssan said the dam constitutes "a threat" to Quneitra and surrounding areas that are rich with water because of the high rate of rainfall in the winter months.

U.S.-brokered talks between Israel and Syria broke down in 2000. Syria wanted Israel to withdraw from the entire Golan Heights, extending down to the Sea of Galilee on the western side. Israel refused to make such a pledge until the issues of security and normalization of relations had been settled.