As Sharon added fuel to US criticism of Damascus, accused by Washington of harbouring Iraqi leaders and chemcial weapons, Israeli forces killed two Palestinians in the territories, including a local militant leader gunned down in his West Bank hideout.

Sharon told the daily Yediot Aharonot that "Bashar al-Assad is dangerous because he is capable of making the same error over the balance of forces with Israel as he made with the Americans, and he has a force which obeys his orders: Hezbollah," Lebanon's Shiite Muslim militia.

"He is dangerous because his judgement is defective. During the war in Iraq, he proved he does not have the ability to reach the right conclusions from relatively obvious facts," he said.

"All those who considered the facts (before the war) could have known that Iraq would lose. But Assad thought the United States was going to lose," the prime minister said.

Syria openly opposed the US-led war to topple Iraqi President Saddam Hussein.

Damascus has since come under mounting US pressure amid allegations over weapons of mass destruction, harbouring Saddam regime members and supporting radical anti-Israeli groups.

Sharon said Israeli security services had information that Iraqi regime members on the run had taken refuge in Syria and that Baghdad had transferred banned weaponry to its western neighbour.

The aim was "to hide them from the eyes of the United States" or to arm Hezbollah, he said.

The Israeli prime minister called for the United States to put "very heavy pressure on Syria, not necessarily by going to war, but through political and economic pressure".

He laid down a list of demands for Washington to present to Damascus, notably the ouster of radical Palestinian groups based in the Syrian capital and the expulsion of Hezbollah from Lebanon's border with Israel.

The White House on Tuesday branded Syria a "terrorist state" and a "rogue nation" and Defense Secretary Donald Rumsfeld said Syria has conducted a chemical weapons test during the past 15 months.

Secretary of State Colin Powell said Washington was mulling "possible measures of a diplomatic, economic or other nature as we move forward".

Israel is officially still at with Syria and has annexed its strategic Golan Heights which it captured in the 1967 Arab-Israeli war.

Meanwhile, Israeli forces pushed ahead with their tireless search for Palestinian militants in the West Bank, reoccupied since a spate of suicide bombings last June.

The army shot dead a local militant leader in the northern city of Nablus when they stormed his hideout, triggering an intense gunfight.

Israeli and Palestinian security sources said the man was a local leader of the radical Islamic group Hamas, but the Al-Aqsa Martyrs Brigades, a hardline nationalist group linked to Palestinian leader Yasser Arafat's faction, claimed him for their own.

Another Palestinian man was killed by Israeli tank fire in the southern Gaza Strip town of Rafah overnight, Palestinian medics said.

Hard by the Israeli-controlled border with Egypt, Rafah has been a continual flashpoint of the 30-month-old Palestinian uprising as the army has sought to prevent arms smuggling across the frontier through tunnels.

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