"Israel is not ready for peace, not at the political or popular level. The conditions for peace are not there in Israel, mainly because of its weak government," Assad said in an address to parliament.

Israeli Prime Minister Ehud Olmert's popularity ratings are at a record low, with his government rocked by the perceived failings of last year's Lebanon war and a string of corruption scandals.

Assad took aim at what he called "the lack of an honest broker" to achieve any breakthrough in Arab-Israeli peace efforts.

"The peace process is hostage to the US administration which uses it as a consolation prize to trade off for positions which serve its interests and strategy," he charged.

The United States will "end up aggravating the crisis with an illusory peace which will lead our region to more chaos and instability," Assad warned.

"We have rejected all measures aimed at spreading blind chaos in our region... especially in Iraq... in the name of a New Middle East which aims to remodel our region according to Israeli interests."

Assad said the only way for Israel to prove it was seeking peace with Syria would be to return the Golan Heights, which the Jewish state seized in the 1967 Middle East war, in line with UN land-for-peace resolutions.

US-brokered peace talks between Israel and Syria collapsed in 2000, mainly because of deadlock over the return of the Golan.

On Thursday, Israeli media reported that the foreign ministry has recommended a resumption of peace talks with Syria despite Olmert's opposition.

Meanwhile, Israeli Foreign Minister Tzipi Livni was in Cairo yesterday for what she described as "historic" talks with her Egyptian and Jordanian counterparts on rekindling a long-dormant regional peace plan.

"The next meeting is not only an important but an historic meeting," Livni told reporters before talks with Ahmed Abul Gheit and Abdel Ilah Khatib, foreign ministers of Egypt and Jordan respectively.