Further informal agreements made would see Syria agreeing to end its support for Hezbollah and Hamas and distance itself from Iran, and a park covering a significant portion of the Golan Heights set up for use by Israelis and Syrians alike.
The contacts were carried out between September 2004 and July 2006 in Europe with the knowledge of Syrian and Israeli government officials, the paper said, adding that the last meeting held during Israel's summer war with Hezbollah.
Haaretz said Alon Liel, a former director-general of Israel's foreign ministry, took part in a series of meetings with Ibrahim Suleiman, a US-based Syrian, and a European mediator it did not name.
Akiva Eldar, who wrote the newspaper report, said on Israeli Army Radio that the European and Suleiman travelled to Damascus eight times and discussed the proposal with Farouq al-Shara, currently a Syrian vice president.
The office of Ehud Olmert, the Israeli prime minister, denied knowledge of the meetings.
"Neither ... Ehud Olmert nor his office were informed of these secret contacts with the Syrians and their arrangements," Miri Eisin, an Israeli spokeswoman, said. Israeli public radio quoted an unnamed senior official close to Ariel Sharon, Olmert's predecessor, as denying that the former Israeli prime minister was informed of the talks.
According to Haaretz, the secret contacts ended after the Syrians requested that they be upgraded from unofficial status and Israel refused. Galilee dispute Syria has been pressing publicly for Israel to renew official peace talks, last held in 2000, on the future of the Israeli-occupied Golan Heights.
Negotiations broke down largely over Syria's demand for access to the Sea of Galilee, Israel's main reservoir situated at the base of the heights.
In Damascus a Syrian foreign ministry official said: "No negotiations took place, the Haaretz report is completely false." The Israeli daily said the so-called non-paper that emerged from the unofficial discussions, proposed an Israeli pullout from the Golan to lines Israel held before the 1967 Middle East war in which it captured the strategic plateau.
Under the proposed understandings, Israel would retain control over the waters of the Sea of Galilee, but both sides would have joint use of a buffer zone a park along its shores that would act as a buffer zone.
According to the document, Israel would gradually evacuate Jewish settlements on the Golan Heights and the territory would be demilitarised, the newspaper said.
In remarks quoted by Israel Radio, Liel said he "did not represent anyone" in official Israeli circles when he participated in the discussions.