Israeli Prime Minister Ehud Olmert has told Syrian President Bashar Assad that Israel is willing to give up all of the Golan Heights for peace with Syria.
That's according to a government-backed Syrian News agency report from Damascus published this morning.
The agency says Olmert passed this message to Assad through Turkish Prime Minister Recep Tayyip Erdogan.
For some time, reports have been circulating that both Syria and Israel have been exchanging messages through Turkish mediation.
Both Assad and Olmert have now publicly admitted to indirect communications.
The Prime Minister's Office in Jerusalem refused to confirm or deny today's report.
Spokesman Mark Regev told ABC News, "We don't comment on media reports, but Israel has clearly stated we want peace with Syria. The prime minister has made this very clear in recent interviews. We understand Syria's expectations. The Syrians understand our expectations."
On Sunday Assad told a meeting of his Baath Party in Damascus that "friends are making efforts to renew negotiations between Israel and Syria."
Israel occupied the Golan Heights during fighting in the Six Day War in 1967.
The Syrian regime of Hafez al Assad, the current president's father, came close to negotiating a return of the territory from the Israeli government of Ehud Barak in 2000 under a process mediated by President Clinton. This process collapsed when the two sides failed to agree on the final border between the two countries.
Israel is widely thought to be demanding a significant change in Syria's strategic and diplomatic positions before a deal can be done on the land. Land has long been thought of as a strategic asset.
Israel is also known to be unhappy with Syria's cosy relationship with Iran and North Korea and condemns its support for Hezbollah in Lebanon and Hamas in the Palestinian territories.
For many Israelis full peace with Syria should mean an end to all those relationships.
On Monday former President Carter claimed that 85 percent of the differences between the two countries have already been resolved. He had just returned from meetings with Assad and leaders of Hamas.
During an interview with ABC News in Jerusalem, Carter said, "Assad is very eager to commence talks. He's very eager for the U.S. to play a key role and to resolve the question of the Golan Heights."
But the current U.S. administration seems unlikely to embark on a peace drive with Syria.
President Bush views the Assad regime in Damascus as part of the problem in the war on terror and has accused it of destabilizing U.S. efforts to bring peace to Iraq, meddling in the internal affairs of Lebanon and backing Palestinian extremists.
Washington has been a leading proponent of economic sanctions against key figures in the regime and backs a U.N. investigation into the murder of former Lebanese Prime Minister Rafik Harriri, which many in the West allege was a Syrian-inspired plot.