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Echoing US comments, Livni said Israel wanted to live in peace with its neighbours, but Syria needed to "distance itself completely" from "problematic ties" with Iran.

 

Syria, she told reporters, must also stop "supporting terror - Hezbollah, Hamas", groups backed by the Islamic Republic.

 

Ehud Barak, the Israeli defence minister who as prime minister in 2000 took part in US-hosted talks with Syria that failed over the key issue of the future of the Golan Heights, said in a speech that both sides would have to make "painful concessions".
 

The US, in its initial public reaction to Israeli-Syrian contacts, said it did "not object" to talks, but repeated its criticism of Syria's "support of terrorism".

 

Many analysts say US hostility to Damascus, and to its Iranian and Lebanese Hezbollah allies, makes a Syria-Israel deal unlikely before George Bush, the US president, steps down in January.

 

Complex process

 

Olmert, who revealed the discussions with Syria two days before he faces a police interrogation over bribery allegations he has denied, said the peace track would be long and complex.

 

A television poll found 70 per cent of Israelis opposed giving back the Golan Heights to Syria, and a majority also believed Olmert was using the talks to distract from the criminal investigation that could force him from office.

 

Yossi Verter, a columnist for the Israeli newspaper Haaretz, said: "Everyone knows that Olmert wants to end his term on a diplomatic note, not a criminal one. The question is, what will come first - an indictment or a peace treaty." 

 

Barak, leader of Israel's centre-left Labour party, said peace with Syria could be achieved only from a position of strength and self-confidence.

 

Walid al-Moualem, Syria's foreign minister, said Israel had shown that it might return the plateau.

 

"Without this commitment, we cannot conduct any negotiation," he said.

 

Among Olmert's vast army of domestic critics, supporters of the 18,000 Jewish settlers in the Golan Heights threatened to bolt his fragile coalition if he tries to give up the territory.

 

Meanwhile, the Jerusalem Post reported Olmert's approval of 286 new housing units in the ultra-orthodox settlement of Betar Illit, a town 10km southwest of Jerusalem.