His comments have contradicted a fellow minister whose remarks had outraged Syria and the United States.

"There is no programme, there is no policy, there is no expansion of Israeli settlements in the Golan Heights," Deputy Prime Minister Ehud Olmert said in an interview with the BBC.

Israel seized the Golan Heights from Syria in 1967 and annexed them in 1981, a move that was condemned internationally.

Syria, still technically at war, demands the area's return as the price Israel must pay if it wants peace with the Arab world.

But Israeli Agriculture Minister Yisrael Katz angered Damascus on Wednesday by saying the government had agreed to double the number of settlers in the Golan in order to solidify  Israel's hold before opening any peace negotiations with Syria.

'Deluded idea' 

Syria denounced the idea as deluded and illegitimate.

Olmert said Katz, who runs the right-wing cabinet's settlement committee, had been wrong to say there was any scheme to develop agricultural, tourist or settlement infrastructures.

Israel has been occupying Golan
Heights since 1967

"He may want to do it, which is perfectly legitimate for him," Olmert said.

"But in terms of a government commitment, I checked it time and time again with the prime minister in the last couple of days and with the finance minister. There is no such approved programme."

He said some ministers might be in favour of such plans but insisted they would not get the go-ahead from the government.

But he denied that Katz's comments had caused chaos in the cabinet and said the minister should not be asked to resign.

Israel's main ally, the United States, has said it should freeze all settlement activity - as it is meant to in the West Bank and Gaza Strip under a US-led plan for peace with the Palestinians.

The Golan has not suffered violence in the three years of Israeli-Palestinian conflict despite the fact that 20,000 Druze there generally see themselves as Syrians and oppose the presence of 17,000 Jewish settlers.

Syrian President Bashar al-Assad recently urged Washington to help revive talks with Israel that fell apart in 2000.

As well as strategic high ground, the fertile Golan Heights ensure Israeli control of important water resources in the arid region, land for vineyards, orchards and cattle-grazing.