"We are following closely developments in Syria," Mofaz said:

"I think the Syrians are aware of our deterrent capacities and would hesitate to attack us."

He spoke after the United States warned Damascus it must cooperate in efforts to get rid of chemical weapons Washington says are on Syrian soil.

"There is nothing to worry about. Especially since the Americans sent authorities in Damascus a clear warning," the Israeli defense minister said.

In addition to veiled threats over the alleged chemical weapons, US President George W. Bush, Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell have told Syria is must not accept fleeing leaders of Iraqi President Saddam Hussein's toppled regime.

The warnings have sparked verbal clashes between Syria and Israel, with Damascus charging Israel possesses an extensive arsenal of weapons of mass destruction.

Israeli Prime Minister Ariel Sharon turned up the heat Tuesday by labelling Syrian President Bashar al-Assad as dangerous because he could misjudge the balance of power between their countries.

Defense Minister Mofaz also spoke of developments among the Palestinian leadership, saying: "It is important for Israel to begin a political settlement process with the Palestinians, because historic developments are taking place among them."

"The Palestinians have understood they cannot attain their goals with terrorism, and Israel must therefore engage in a political process as soon as conditions permit."

"Accepting dialogue means accepting concessions, and the important thing is that the process gets started.

"But the new Palestinian leadership must take a strategic decision to fight terrorism and succeed in wiping it out by being provided with effective powers," he said.

Mofaz pledged Israel would dismantle illegal Jewish settlements in the West Bank and Gaza Strip, and promised a security barrier would be built along the so-called Green Line separating the former from Israel.

Finally, he said: "In accordance with Israel's austerity budget, the defense budget will be reduced, but that will not affect research projects on arms for Tsahal," as the national army is known.

SPACE.WIRE