Bar-On said: "Instead of leaving this area in ruins as they had for decades, the Syrians want to populate the area which means this is more than a war front for them."
Sami Bar-Lev, a leader of the Golan local council, said that 400 additional homes are under construction in Katzrin, home to 7,500 people and the largest Jewish settlement.
Disputes over the return of the territory contributed to the collapse of peace talks in 2000.
Ehud Olmert, the Israeli prime minister, dismissed the renewal of peace talks on Monday following an appeal by Bashar al-Assad, the Syrian president.
"We do not have the impression that there is currently a basis for opening negotiations with Syria," Olmert told a joint media conference after talks with Tony Blair, the British prime minister.
In an interview with the Italian daily La Repubblica last Friday, al-Assad called on Israeli and US leaders to negotiate with Damascus to revive peace talks which have been frozen for almost seven years.
"Many voices are being raised in Israel" for dialogue with Damascus, al-Assad said. "So I say to Olmert: let him try, and see if we are bluffing."