Senior Israeli officials are pouring cold water on reports that a secret peace deal was reached with Syria last year.

According to the Israeli daily Haaretz, the deal would involve Israel returning the occupied Golan Heights to Syrian sovereignty, 40 years after they were seized in the 1967 war.

Most of the area would become a park to which Israelis would have unfettered access, and Israel would continue to control the waters of the Jordan River and the Sea of Galilee.

In addition, Syria would abandon its alliance with Iran, end its support for Palestinian militant groups and for Hezbollah in south Lebanon.

However, David Baker, an official in Israeli Prime Minister Ehud Olmert's office, said that "the Israeli Government is unaware of any such meetings".

Haaretz reported that the outline agreement was drawn up by former Israeli diplomat Alon Liel and a Syrian-American citizen, Ibrahim Suleiman. The contacts were initiated by Syrian President Bashar Assad and took place under Turkish and European mediation.

The talks reportedly came to a halt after Israel refused Syria's request for the discussions to be moved to the official level.