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Syrian Foreign Minister Walid Moallem on Wednesday denied the Israeli accusation that his country is arming Hezbollah, speaking in an interview published by the al-Sharq al-Awsat newspaper.

"It is not correct that Syria is supplying Hezbollah with weapons and equipment, as is claimed. Hezbollah does not need this," Moallem told the pan-Arab paper.

He argued that Israel was making the accusations merely as an excuse for Israel Air Force overflights of Lebanon.

A key Israeli demand in indirect peace negotiations with Syria is that Damascus cease its support for the Lebanese militant organization Hezbollah.

Moallem did say that there was nothing his country could do to halt ongoing smuggling of other supplies to Hezbollah from its territory, saying that it was impossible to hermetically seal the Syria-Lebanon border.

"The question of the border between Syria and Lebanon needs two actions: delineation [of the frontier] and Syrian-Lebanese security cooperation," Moallem was quoted as saying. "Nobody can control the borders with Lebanon."

Meanwhile, sources told the Lebanese Web site Lebanon Now on Tuesday that Hezbollah has requested that its operatives refrain from visiting Syria in the wake of a Saturday's deadly car bombing in Damascus.

A massive car bomb struck a crowded residential street in the Syrian capital of Damascus on Saturday, killing 17 people and injuring 14 others, Syrian television reported.

The report, which was not confirmed by any other source, stated that the warning was directed in particular toward the Lebanese militant organization's security officials.

In the al-Sharq al-Awsat interview, Moallem also rejected President Shimon Peres' call for Assad to agree to follow example of former Egyptian President Anwar Sadat and agree to direct peace talks with Israel. He argued that these comments show that Israel is not interested in a real peace, saying that in the negotiations the cart should not be put before the horse.

On Tuesday, the Wall Street Journal reported that Moallem met with U.S. Secretary of State Condoleezza Rice in New York last weekend.

According to the report, Moallem and Rice met Friday on the sidelines of the United Nations General Assembly, and the Syrian foreign minister had more detailed talks with U.S. Assistant Secretary of State for Near Eastern Affairs David Welch.

A State Department official told the Wall Street Journal that the U.S. discussed its support for Israel-Syria peace talks, and also used the meet to air its grievances with Syria, including Damascus's hand in the security situations in Lebanon, Iraq, as well as the West Bank and Gaza.

The paper quoted Moallem as saying the talks represent "good progress in the American position," and said Syria vows to "continue this dialogue."

In regard to the upcoming U.S. presidential elections, Moallem said Syria looks forward to better ties with the next U.S. administration, adding that he hopes the thawing of Bush's positions toward Syria "will have its implications for the future administration."

When asked how a peace deal between Syria and Israel would affect Damascus's relations with Iran, Moallem said, "Iran is an important player in the region," adding that he doesn't see the Iranians opposed to the "liberation" of the Golan Heights by peaceful means.

Syrian President Bashar Assad, meanwhile, said on Tuesday that peace talks between Syria and Israel will not weaken his country's ties with Iran.