Syria "not optimistic" on peace with Israel: VP

DAMASCUS (Reuters) - Syrian Vice-President Farouq al-Shara downplayed prospects for peace with Israel on Thursday, saying there was a lack of crucial U.S. backing.

"We are not optimistic. The American president does not want peace between Israel and Syria," Shara told journalists at his office in the Syrian capital.

"Ehud Olmert is not serious about peace either. Israel will make peace if we compromise on regaining the whole of our occupied territory. We won't," he said.

The Israeli prime minister has expressed willingness to hold talks with Syria but said Israel wanted Damascus to sever ties with Iran, Lebanon's Hezbollah movement, Hamas and other Palestinian groups that do not recognize Israel.

Shara, an influential player in Syrian foreign policy, said it was pointless to address whether Syria was willing to change its policy of reinforcing links with Iran and backing for Hezbollah and Hamas in the light of what he said was Israeli and U.S. unwillingness for a peace deal.

"Our priority is peace, while some Israelis are hinting at war with Syria if we do not compromise. We take their threats seriously," Shara said.

Shara said that, although mediators had tried secretly to narrow the differences between Israel and Syria, direct talks between them must be conducted in public.

OCCUPIED PLATEAU

"We have no interest in secret negotiations. We have already negotiated publicly with Israel for years," he said.

Talks between Syria and Israel collapsed in 2000 without resolving the fate of the Golan Heights. Syrian officials have made it clear they welcome any U.S. involvement that enables the talks to resume.

The plateau was occupied by Israel in 1967 and annexed in 1981 in a move declared void by the U.N. Security Council. Regaining it has returned to the fore in Syrian foreign policy.

Olmert, on a visit to the United States, also downplayed chances of a peace agreement on Tuesday, rejecting what he said was a precondition by Damascus for U.S. mediation.

Western diplomats in Damascus expected the United States to continue opposing a resumption of Israeli-Syrian talks so long as Syria kept challenging Washington in Lebanon, from where Syrian forces withdrew in 2005 after a 29-year presence.

"There has been progress between Syria and Washington on Iraq but their positions on Lebanon remain almost irreconcilable," one diplomat said.

The United States, Israel's chief ally, imposed sanctions on Syria in 2004, mainly for its support for Hezbollah and Hamas.

Relations between Syria and the United States have plummeted further since, although senior U.S. politicians visited Damascus this year.