JERUSALEM (JTA) — With Syria talking peace while in the throes of a major new arms buildup, Israeli intelligence is divided again over President Bashar Assad’s intentions.

The Mossad intelligence agency argues that Assad is not interested in peace, but only in a peace process to alleviate international pressure on Syria over its meddling in Lebanon and Iraq, and its suspected implication in the assassination of former Lebanese Prime Minister Rafik Hariri. Military intelligence, however, maintains that Assad is genuine and would be ready for a peace deal with Israel in exchange for the strategic Golan Heights captured by Israel in 1967.

For now, Assad is unlikely to be put to the test. The U.S. strongly opposes any Israeli contact with Syria on the grounds that even exploratory talks would help get Assad off the hook internationally. Prime Minister Ehud Olmert agrees and is resisting domestic pressure to engage the Syrians.

Mossad Chief Meir Dagan and military intelligence boss Maj.-Gen. Amos Yadlin spelled out their differences when they briefed Olmert in mid-February on the national intelligence estimate for 2007. Yadlin argued that the possibility of peace with Syria was strategically far too important for Israel to ignore, that it could weaken Syria’s ties with Iran and put pressure on the Palestinians to cut a deal with Israel.

Moreover, the very fact of talks with Damascus would lessen border tensions, and if the Syrians knew that at the end of the day they would get back the Golan, there would be a real chance for peace. But there was a caveat: If peace talks broke down, the Syrians might feel, like the Palestinians after the Camp David failure in 2000, compelled to go to war.

Dagan argued that Assad only wanted negotiations for tactical reasons, on the assumption that talks with Israel would ease Western pressure on Damascus, especially from France over the Hariri investigation and the U.S. over Syrian support for insurgents in Iraq. In the Mossad chief’s view, the Syrians have no intention of making peace with Israel, and Israel shouldn’t play into their hands.

Despite the accelerated Syrian arms buildup and the absence of talks, both Yadlin and Dagan estimate that the probability of war with Syria this year is low. In presenting the intelligence estimate to the full Cabinet Sunday, both men predicted that Syria would not initiate war against Israel in 2007, but that it would respond if it felt threatened. Military intelligence believes Syria won’t go to war until it explores peace possibilities with Israel; the Mossad maintains the Syrians won’t go to war because they don’t think they are strong enough yet. In Dagan’s view, they will go on rearming until they feel ready to take on Israel within the next 10 years.

According to Ze’ev Schiff, one of Israel’s leading military analysts, the Syrian arms buildup over the past few months has been on a scale unprecedented in recent times.

With generous funding from Iran, Syria is buying thousands of sophisticated anti-tank weapons from Russia, upgrading its navy and deploying advanced Scud-D missiles with a range capable of covering virtually every point in Israel. The Syrians also recently successfully test-launched a Scud-D missile and reportedly have been supplying Hezbollah in Lebanon with medium-range rockets with cluster-bomb warheads.

Analysts give a number of reasons for the Syrian arms buildup: In the wake of Israel’s 34-day war against Hezbollah in the summer, a sense that the Israeli home front is vulnerable to missile attack and Israeli armor to Russian-made anti-tank weapons; fear that if another war between Israel and Hezbollah breaks out in the North, Israel might target Damascus; a desire to use the threat of war to persuade Israel to talk peace; and a desire to be in a position to use force to change Middle East realities.

Some pundits suggest that the Syrians are acting out of a sense of insecurity. They point out that Syrian oil supplies are running out, that the Syrians don’t fully trust their Iranian ally, that their influence in Lebanon has been severely diminished, that American soldiers in Iraq are on their doorstep and Israel has been conducting large-scale military maneuvers on the Golan Heights. According to these pundits, the insecurity is one of the main reasons for both the arms buildup and the peace overtures.

Olmert, however, remains adamantly opposed even to secret feelers to test Syrian intentions. In a meeting with foreign correspondents on Feb. 21, he argued that Syria was still supporting terror, smuggling arms into Lebanon and trying to sabotage its legitimate government. Under these circumstances, Olmert said talks with Damascus would simply help Syria “pretend that it is now a peace-loving country,” and help it get the investigations into its role in the Hariri murder and its ongoing military aide to Hezbollah dropped.

“We are interested in peace, not in the ‘industry of peace,’ ” Olmert declared. But Syria did not want peace, only a peace process, he said.

“How can you sit down and negotiate with someone who at the same time is preparing to assassinate you from behind your back?” Olmert asked.

Unlike Olmert, Defense Minister Amir Peretz and other mainly Labor ministers are ready to test the Syrians’ sincerity. Peretz is deliberately staying low key on Syria’s arms buildup to avoid getting into a war of words. He argues that Israel cannot afford to ignore any chance for peace with Syria.

But the differences within the Olmert Cabinet are unlikely to come to a head, given the American veto on contacts with Damascus. In her recent visit to Israel, Secretary of State Condoleezza Rice made it clear that the United States was adamantly opposed even to exploratory talks with Syria. When Israeli officials asked her about the possibility of sending out feelers to test how serious Syria was about peace, she reportedly snapped, “Don’t even think about it.”

The uncompromising American veto makes for two grim intelligence estimates: Dagan’s, which sees years of stalemate, with Syria preparing for war as soon as it feels strong enough, and Yadlin’s, which sees Syria rearming while waiting for changed circumstances that would enable a peace feeler from Israel or a military move by Damascus.